Tariffs, Free Trade, Export Controls, H20 & Rare Earth Ban | BG2 w/ Bill Gurley & Brad Gerstner

**Bill Gurley** (0:00)
Almost everyone in the AI space that I see with a microphone in front of them says, the US has to win the AI war. I don't know what that means. And if I guess as to what it means, I don't think it's possible.

**Brad Gerstner** (0:14)
Right, because it's an infinite game.

**Bill Gurley** (0:16)
It's an infinite game, and no one that I talked to would argue, we're gonna somehow prohibit them from moving forward in AI. Let's not forget, it wasn't that long ago that OpenAI, they'll say, borrowed or copied the innovation that happened at Google and DeepSeek. This is how innovation works.

**Brad Gerstner** (0:48)
Bill, great to be back in person.

**Bill Gurley** (0:50)
Good to see you, sir.

**Brad Gerstner** (0:51)
That was fun last night. We have to give a little shout out to our friends Vinnie and Bill Lee and some others who we got together with in Austin last night for some poker. I think you did all right last night. You had some winnings and you had some more winnings. In fact, I brought you some flowers. This is for your Florida Gators. You bring your flowers.

**Bill Gurley** (1:07)
Thank you. I'm sure the listeners are tired of hearing. I started the last two podcasts, one before the Sweet 16 and one before getting into the final four, and then of course, everyone knows the Gators went all the way. I had a bunch of friends out. We spent the whole day, the Monday of the game day on the river walk outside the team hotel, saw a bunch of old friends. I know fandom is a weird thing because you don't actually do anything. You just go along for the ride. But it creates a very special experience and I'm super proud of what they did in that team and how they won. I had talked about it before.
It was dramatic too, but it was a great time. Just a great time. What have you been up to?

**Brad Gerstner** (1:46)
Speaking of games, that was an exciting upset by the Warriors in game one over Houston the other night. I hope our guys make a run at it this year. Certainly looks like they're a totally different team with Jimmy Butler on the team.

**Bill Gurley** (1:58)
No doubt.

**Brad Gerstner** (1:58)
I think they're 25 and 4 or something like that since the Jimmy Butler trade.

**Bill Gurley** (2:02)
Completely different.

**Brad Gerstner** (2:04)
I'll tell you, man, I'm thinking a lot. In fact, this is something you really drilled into me ages ago about thinking about just complex systems. When I look at all the things this new administration is trying to change simultaneously, you and I talked three months ago. I said I was worried about the markets, discount rates had to go up, there was more uncertainty in the world. But when I start thinking about what's going on, what this administration is trying to accomplish all at very large scale, so think about this. Whatever you think about each one of these individual things, they're trying to totally transform global trade. So trade negotiations with 100 countries, we effectively have an embargo between us and China, 140% tariff, export controls, and so we have to renegotiate that deal. Besant said today, it really hasn't even started, that's going to be a slog. On top of that, we have taxes. If we don't lock in the tax bill, it doubles at the end of the year. We have this reconciliation package. We have doge and deficit reduction. We have questions around the 10-year and whether or not deficit is going to actually be larger this year. We have the war in Ukraine.
Lots of back and forth there. We have dealing with the volatile situation in the Middle East. It sounds like we were on the verge maybe of seeing an Israeli attack on Iran. All of these things are happening simultaneously.
One of the things that's just on my mind, if you look at the discounted rate of dealing with any of them successfully and then you multiply those discounted rates together, the probability that you're going to land this plane in just a really smooth landing, I think is challenging to see. We're going to have some wins, we're going to have some losses. Today, I know we want to revisit some of these conversations around tariffs and free trade and these export controls and where we are in the market. But I would just say, we're attempting something very high difficulty level. And if this administration is able to land the plane on all these, it will be quite an accomplishment.

**Bill Gurley** (4:21)