Paul Kedrosky: Nvidia Is Now the AI Bubble's Single Point of Failure

**Paul Kedrosky** (0:00)
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**Dick Costolo** (0:19)
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**Dan Nathan** (0:40)
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**Paul Kedrosky** (0:44)
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**Dick Costolo** (0:46)
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**Paul Kedrosky** (0:55)
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**Dan Nathan** (0:57)
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**Paul Kedrosky** (1:02)
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**Dan Nathan** (1:09)
Welcome to the Risk Reversal Podcast. I'm Dan Nathan, that is Paul Kedrosky. Paul, how are you doing, man?

**Paul Kedrosky** (1:15)
Good, how are you?

**Dan Nathan** (1:16)
I'm doing great. You know, you and I have not really talked a whole heck of a lot over the last few weeks, but I've gotten to listen to you and Dick. You guys launched a podcast, I want to say early this year, it was the Nick, Dick & Paul Show. Now it's just the Dick & Paul Show. We've been helping you guys relaunch this thing. It's been a real pleasure. Dick was on with me last week, or two weeks ago, I think.

**Paul Kedrosky** (1:39)
Oh, was he? Okay, great.

**Dan Nathan** (1:40)
Yeah, he was great. I mean, we had a conversation, really going through his background, you know, you know it very well. I mean, he's had a front row seat as an operator, as a former startup founder, now as a investor. You are also an investor, you're also an academic, you're a fellow at MIT, you're a former founder yourself. And now you also advise hedge funds, is that right?

**Paul Kedrosky** (2:05)
Yeah. I mean, so I have this ridiculously popular sort of newsletter thing and I kept getting people asking me if I would, you know, talk to them about stuff. And I'm really reluctant to do much of that because what it does is it gives people sort of ownership of my calendar, and I'm really protective of my calendar. So what I'd reluctantly agreed with was, I have about six clients that I do a couple of calls a month with, and just in general, some very, very large hedge funds who are kind of trying to think about life, the universe, and whatever madness is going on right now in terms of broadly within the AI context. But my, you know this from listening to me talk before and whatever. But I mean, my general approach to things is very much like a systems thinking thing like the hip bones connected to the knee bone kind of stuff.
And so I try to, I force these, my clients in that context to think holistically about, you know, if the current orthodoxy example is, you know, what's happening with respect to, for example, I don't know, like data center capex squeezing out or having some impact on the 10 year treasuries. And is that true? At what scale would that have to happen? You know, these kinds of ideas of second and third order effects are super interesting to me right back to my graduate school work. And then more recently this stuff. So long answer to a short question. I spent a lot of time connecting hip bones and knee bones these days.

**Dan Nathan** (3:23)
Well, I think one of the things that I really enjoyed about your podcast, especially you and Dick one on one, is that you're not having conversations that seem like the obvious one. You know, the ones that we hear a whole heck of a lot debated on CMBC or Bloomberg or on most scores of podcasts, that sort of thing. And it's really like dropping into a convo of just some really smart people who don't have an axe to grind. And I think that's really important. So I've enjoyed it. We're going to put your second episode, I think, on the back end of this. I really encourage people to listen to it, watch it on YouTube. This episode that we're running, what was the topic? It was something about CapEx has gone full Enron, which I'm really jealous about the title.