The Shifting AI and Energy Trades

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Paul Sweeney (0:28)

We know if somebody knows about this tech space here. Dan Ives, he's a partner, Yorkville, Ives and Company. So here's a top story on the Bloomberg terminal. Anthropic and OpenAI are promising measures to rein in the pursuit of cutting edge AI models to better understand the risk posed by the technology. Dan, I'm not sure I saw this coming. I'm not sure the market saw this coming.

What do you make of it?

Daniel Ives (0:53)

Yeah, look, I mean, I think there's a few ways to sort of dissect it. One, this is a step in the right direction relative to safety. Because it's our view, self-regulation is going to be the ultimate path. But, you know, call it regulatory capture. When you see calls in the beltway looking for more and more regulatory, ultimately OpenAI and Anthropic, they took it by themselves and said, okay, we're going to ultimately start to now say that there should be a slowdown. But the reality is China is not slowing down.

And if China doesn't slow down, this is all words, because US tech is not going to slow down. I think that is what investors are trying to navigate to understand what's real versus essentially just more talk.

Paul Sweeney (1:41)

This is coming from the companies themselves, Dan, and presumably they have a lot more knowledge than I do, than Tom does, than most folks out there do. I think a lot of folks out there are just saying, A, even before this talk of the last week or so, we really didn't know the risks associated with AI.

Now if these folks are telling us to put on the brakes, how do you think this plays out?

Daniel Ives (2:06)

Well, I think part of the problem is that you can take the elevator to the penthouse and then stop the elevator so others can't come. So there is a competitive issue here, right?

Where, especially when you demand sovereign AI, a lot of the sub-palantir and others are doing, I think that will be, I think investors will view it skeptically, relative to the non-anthropic. Two, this is not stopping one penny of money that's going into the data center and the AI capex. And I think that, right, you'll have a knee-jerk reaction in terms of stocks, but as investors digest it, the reality is China's not slowing down, US tax is not going to slow down.

Tom Keene (2:47)

Good morning, across America. The commitment of our guests to get up early. Daniel Ives, killing it out of Los Angeles at a way too early hour as well. I want you to fold in here, Dan. Over the weekend, I was deep into AI. No, we're not. Should the turkey be cooked to 330 or 340? You know, Dan, I look at AI, and all I can think of is the Chinese. I got a massively split Washington, but I have a China with one plan.

With all of your tech experience, is this just simply the dawning reality of China with a cheaper, better distribution product that's not quite as good?

Daniel Ives (3:33)

Yeah, I'd say that as well as China having a government that's trying to pour gasoline on this to really accelerate them rather than maybe the opposite that's happened in the US.

Because for the first time in 30 years, the US is ahead of China when it comes to tech. You don't want people in the Beltway that are still using blackberries to then regulate that AI. Then when you talk about Anthropic and OpenAI, it comes down to like, these companies are essentially the top of the mountain. Do they want others not to come up? And that's where the industry is going to be.

Tom Keene (4:13)

Paul was too kind on how dumb I am.

That was an accurate statement. But all the smart people I talked to, Dan Ives, are adamant they don't know where we are in six months. Dan, let's go narrow.

Where are we in six weeks? Are we just going to see a new clod, a new chat this, the chat that? I mean, are we just going to just grind forward here?

Daniel Ives (4:34)

Dom, I think it's also the models over time would become more commoditized. The values and the data, and you're seeing that. You talk about software companies, I'm talking about what's happened in cyber security infrastructure. You're now going to the second or fourth derivative because of the trillions of dollars being spent. Clod, where you see ChatGPT, those models are going to continue to get better and better. But it's about the data. That's why sovereign AI, NVIDIA, Palantir has talked about that front and center.