If Not Now, Then When Will These AI Companies Go Public?

Guy Adami (0:00)

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Dan Nathan (1:08)

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Welcome to the Risk Reversal Podcast. I am Dan Nathan. That is Guy Adami.

Guy Adami (1:36)

No energy there. Yes, that is Dan Nathan. I'm Guy Adami. We haven't been together in a while. You were traveling, I was traveling, but here we are together again.

Dan Nathan (1:45)

Here we are together back, baby. We're recording this on Friday morning. A lot to talk about. We're just going to preview the week here, Guy.

I want to definitely look back on a couple stories that dropped Thursday and Friday, one of them near and dear to your heart. Apple and Nikkei is reporting that maybe they cut back component orders because the 18 and the 18 Pro that they just released, if you're listening to this, Guy is about to fall off his chair and the stock is down 2% and there's a stock that has traded with a good deal of relative strength, if you will. Also, a story out, this hit Thursday, dropped the NASDAQ 1.5% in a straight line that OpenAI, the way they are recognizing certain bits of revenue that they were guiding the street prior to about 70 billion, it was going to be 50 billion, but then the company comes out and basically says, it is 70 billion, but it really is a way in which they are calculating annual revenue rates and how much of it is like stuck in their customers, that sort of thing.

Guy Adami (2:45)

Can I just stop you right there?

Dan Nathan (2:47)

Sure.

Guy Adami (2:47)

Okay.

Dan Nathan (2:48)

It's your podcast.

Guy Adami (2:49)

No, it's not, Dan.

Dan Nathan (2:50)

It's our podcast. If it's your podcast, it's my podcast. It's our podcast.

Guy Adami (2:53)

I think OpenAI is a relatively new, when I say new, it's not a 50-year-old company, right?

Dan Nathan (3:00)

Correct. About five years old.

Guy Adami (3:01)

Yeah, five years old.

If it were a human being, it would be entering kindergarten or something like that. Is that fair to say? Yes. It's the infancy stage of its life. Fair.

Dan Nathan (3:14)

Yes.

Guy Adami (3:15)

When you're already doing fugazi accounting things at this point in the game, you have to say to yourself, and I'm really not trying to be a wise guy here, but you just think about the ramifications of a company who hemorrhages money, who is at the epicenter of this entire thing that we talk about day in and day out, going from 70 to 50 I mean, that is not insignificant. It's one thing to go from 7 billion to 5 billion, excuse me, 700 billion to 5 billion, but 70 to 50 is a pretty significant jump lower.

Dan Nathan (3:48)

Yeah, and a lot of it is just sort of semantics, but it also kind of shows that the way in which this company has been guiding the street or letting information out about their financials, make no mistake about it, going from a billion to 50 billion, it's pretty astounding. The company actually was founded, and we know this, in 2015, and Sam Altman, Elon Musk, a few others, there was 11 founders. At the time, it was not meant to be a commercial enterprise, right? That was the whole idea. So I think really in the last, call it since 2019, when Microsoft, I think, made their first investment, let's call it that when it became a commercial enterprise. So we'll bang around some stuff in tech, and I think you break a great point about the NeoClouds and the way that they traded some of the biggest customers of OpenAI after that announcement. We're also going to talk about big economic data next week, guys, CPI, PPI, and the way rates have been moving, and the reaction to that jobs report, and what happened to the CME Fed Funds futures. It might be something interesting as we go into the October Fed meeting, and obviously the midterms just a week after or so, and then all the bank earnings.