The $230B Investor Who Says Everyone Is Missing the Biggest AI Opportunity

**Jan van Eck** (0:00)
So I say, stay invested in the market. I mean, my one exception is, if you know monetary policy is going to tighten like crazy, that will hurt financial markets. Of course, if you could predict when the budget crisis is going to happen, then you get out as well, but that's hard to predict.
So generally, stay invested. That's number one. Number two is-

**John Gillan** (0:22)
The market saw one of its most violent corrections since 2008 last week. Is the AI bull market over or is V-shaped recovery already underway? Hello and welcome to Milk Road AI, the podcast that knows that the three way that smart investors go broke are ladies, liquor, and Ken Griffin. I'm your host, John Gillan. Today is Monday, August 3rd, and today we are joined by the great Jan van Eck. Jan is the CEO of VanEck, a global investment management firm with $230 billion in assets under management. Jan has served as the CEO since 2010 and is one of the most respected and trusted asset managers on Wall Street. He's going to share a ton of Alpha with all of us today. If that sounds good to you, make sure you like and subscribe, share this episode with somebody who's going to enjoy it. Jan is already laughing in the background, so we're off to a good start here.
As a reminder, our podcast today is free. That would not be possible without our wonderful sponsors at Securitize, the regulated rails for tokenization, and Bitget Stocks 2 with real liquidity, real dividends. Keep an ear out for more information about both of them later in the episode, but without further ado, welcome to Milk Road AI, Jan van Eck. How are you, sir?

**Jan van Eck** (1:26)
I'm great. Look forward to catching up. It's been a crazy markets.

**John Gillan** (1:29)
It has been, and I thought that would be a great place to start the conversation.
The Korean market has pulled back over 40 percent in 40 days. Nearly four percent of the population of Korea apparently has gotten hit with liquidation notices. Is this the top of the semiconductor market in your opinion, or is this just some healthy digestion before we see a V-shaped recovery?

**Jan van Eck** (1:49)
Well, there's lots of different things in that one question, John, so I'm going to just first of all, jump to, I do these quarterly outlooks, and there are a couple of charts. It's funny that you picked Korea. Look, this was clearly, there was a lot of froth in the second quarter. I tend to break up the world into quarters and then decades.
We actually sent out a note saying, look, this is probably not sustainable. I think the Korean market right now is around 6,000. Look, it went sideways for like 17 years and then exploded to the upside and obviously, there's nothing dramatic that changed.
Clearly, number one sign of froth. I would say Korea in particular, because it's dominated by the memory chip companies, was a sign of, there's a whole AI ecosystem obviously, and there's parts that I think are maybe softer and stronger and more structural. I always ask the question, if we're looking back in five or 10 years, which of these companies in the AI ecosystem have a competitive moat, which are the survivors? And there were two areas that I'm wary about coming into the end of Q2. One is these memory stock companies, and the second one is the single model, if you will, companies, just the front, what they call the frontier labs like Anthropic. Because both are just playing one role in the ecosystem rather than having a front to back connectivity between customers and compute. So the memory chip companies, just to answer the specific question, really benefited. Their profits went up because they upped prices. They weren't able to increase volume that much, John. It was really, hey, you need me, there's a shortage of compute, and I'm going to raise your prices. And that's okay for a one or two year game in a corporate America or a corporate world. But your customers are going to try to use, yes, less of your product, and secondly, you're going to have competitors. So even within the last couple of weeks, a very large Chinese memory chip company came to market. It's now the largest cap in China. It was for a while. So already this weak part of the market, even though it was a specular excess, I think is being attacked in the ecosystem.

**John Gillan** (4:18)
Got you. Let's unpack this a little bit more.
I'm curious your thoughts on the forward earnings of these companies, because a lot of the companies that have seen these crazy valuations have seen them come based on the very strong forward earnings. But a lot of investors have questioned the quality of these earnings and how reliable these earnings projections are. Where do you land on this conversation? How do you evaluate the projected earnings from these companies?