Market Predictions, Rates & Inflation, DOGE, CES, AI Compute | BG2 w/ Bill Gurley & Brad Gerstner

**Brad Gerstner** (0:00)
Elon said he thinks that every cognitive task that can be done by a human will be able to be done by an AI within three to four years. If you believe that to be true, the value of all that human labor that you're replacing is measured in trillions.

**Bill Gurley** (0:28)
Good to see you, Brad. Happy New Year.

**Brad Gerstner** (0:30)
Happy New Year. I have on a, you probably can't tell, Bill, I have on a blue shirt today, not a black shirt. I have on my green pants a little Notre Dame spirit for the big Notre Dame game tonight. I know you have a big Texas game coming up.

**Bill Gurley** (0:43)
Yeah, that's tomorrow in Dallas, yeah. So we'll have to see if both those teams could win in advance, it'd be pretty spectacular.

**Brad Gerstner** (0:51)
You and I were talking about some of this insanity going on in LA, and I know we both have a friend who's lost a house and there's a lot of this debate going on online whether or not any of the policies that we've had are approximate causes at least to the severity of the thing that's going on. One of the things that I know you and I both really appreciate is we're entering 2025
Just the opportunity, I feel like the conversation going on online, the debate going on online is more robust than it's been. I think it rubs a lot of people the wrong way, but I tend to be in the camp that the more open debate and accountability, it just the better. No matter what side of the political aisle you end up being on, we should all be in favor of just doing better. When you look at how horrific these scenes are in LA, it just, you have to ask the question, what could we have done better?

**Bill Gurley** (1:50)
Yeah, and I totally agree with you. And I have this framework in my head that I think about in relation to these types of situations, which is a lot of people, I think, evaluate politicians and policies based on what they think the intent of the decision was. And they fail to follow up and then see if the output or the outcome is identical to what they thought the original intent was. And I think all too often the original intent of something may have sounded good or you might be voting for someone because you agree with their point of view. But if the policy fails to achieve that or in many, many cases achieves the exact opposite of that, then you really have to ask yourself, what's the point?
And so, yeah, I hope that this type of accountability and transparency, you know, shining a light and could lead to better outcomes in the future. And there's always trade-offs, obviously, like you can't have everything.

**Brad Gerstner** (2:56)
Yeah, for sure, for sure.

**Bill Gurley** (2:58)
Well, I thought we could do something unique and different, if you're up for it, related to this time of year. So obviously, large investment funds like yourself are typically operating on a calendar cycle. Sometimes, you know, the reporting is certainly looked at annually, and sometimes even some of the fees and whatnot are calculated on annual basis. And so I'm sure that creates a annual cycle for you. And as you've been going through that process, I thought it'd be really cool to expose the listeners to both the analysis that you're going on now but a window into that process. And so, you know, how does someone, a large professional investor like yourself, think about this time of year and specifically what are you looking at now?
And give everyone a peek inside?

**Brad Gerstner** (3:56)
Yeah, no doubt about it. And you know, we've been, I think, having this conversation for 20 years. But you know, half of our business, the venture capital part of our business has a much longer cycle time. What informs how we think about the annual cadence of our public market positioning, which is the other half of our business, is a lot of times these big trends that we're having debates on. We ended last year in this great conversation with Dylan, right? About this tension or debate in the world about how much compute the world needs, all the investment going on, etc. that we'll get into today. But it's all those things including a major political change, right? Going on in this country, that all impact how we think about this year. And so, you know, at the end of every year, I not only look at kind of errors and omissions, like what could we have done better in our public trading and our public investing for 2024? And we had a great year and I'm proud of the team or whatever, but there's a lot we could always can do better.