Winning the AI Race Part 4: Scott Bessent, Howard Lutnick, Chris Wright, and Doug Burgum

**SPEAKER_1** (0:00)
Secretary Bessent, it's wonderful to see you. Before we maybe deep dive into AI, do you want to give us the high level update on the 333 plan? How are things going? You had an incredible clip, by the way, with Maria Bartiromo where you talked about some of the things that were happening economically. Maybe just level set everybody on what's going on.

**Scott Bessent** (0:23)
So, just for good framing, during the campaign, I had a 333 plan.

**SPEAKER_3** (0:28)
I think it's microphone's off. Can we get the microphone on for Scott? Test, test.

**Scott Bessent** (0:32)
Test.

**SPEAKER_3** (0:33)
There it is.

**Scott Bessent** (0:33)
Perfect. Good. So, I had a plan that I called 333, and the idea was to get the budget deficit, which was running about 6.7% of GDP under the Biden administration, highest that we'd ever had when we weren't at war or in a recession down to 3%, 3% plus economic growth on a persistent basis, and to create 3 million more barrels of energy equivalent, so oil and gas before President Trump leaves office. And look, we're full speed ahead. We had the first, June was the first positive June for the Treasury since 2015 We actually had a surplus.
And we did that in a good way. We took in more revenues, some from tariffs, and we brought down spending. And when I think about what we can do here, that what I'm really excited about is the idea with AI that we can go back to the paradigm. When I was younger, in the 90s, Alan Greenspan was able to run the economy very hot in the 90s. And because it was the IT boom, and we had this very powerful non-inflationary growth, and I think that it's highly likely we could have that now. And so that kind of growth would bring down the deficit very quickly.

**SPEAKER_1** (2:22)
There's been a lot of talk today about the amount of cap expending that needs to go into AI, and all of the jobs that it creates. And you posted as well, actually, a couple of days ago, and you talked about that there's just been an inflection point that you've seen in cap expending sort of as a steward of the US economy. Can you tell us about what's happening?

**Scott Bessent** (2:42)
So it's a combination, and it's a barbell. So I've been in Pittsburgh twice in the past four weeks. Four weeks ago, I went with President Trump when he announced the US Steel, Nippon Steel deal, substantial investment by Nippon Steel into an old, very important industry. And then last week, on Tuesday, there was an AI Summit in Pittsburgh, all the big players. And Pittsburgh is a natural location for AI, lots of cheap energy. Carnegie Mellon, Pitt are there. And so it was very interesting to see the juxtaposition there. But we are seeing this incredible capex, the hyperscalers are obviously been in an arms race, kind of the big five, the big seven. We estimate that that is approximately 1% of GDP a year.

**SPEAKER_1** (3:45)
Wow.

**Scott Bessent** (3:45)
So 300 billion dollars.

**SPEAKER_1** (3:48)
Wow.

**Scott Bessent** (3:49)
That's being spent on AI. And in my perfect world, which never happens, we would go through this big capex boom. And then sometime in 26, the capex boom would hand off to a productivity boom.

**SPEAKER_1** (4:06)
And it's an incredible thing because it's sort of you mentioned alluded to this a little bit earlier, but it does violate a lot of economic theory in the sense that it just hasn't had the negative pernicious effects. Do you think is that is that a yet thing or do you think that we're in a structurally different kind of economy now?

**Scott Bessent** (4:25)
You mean the AI boom?

**SPEAKER_1** (4:26)
Yeah.

**Scott Bessent** (4:26)
Well, look, we've seen throughout history that technology can drive these things. If you go back, I'll talk about the ones I was around for. I was not around for the railroads, but I used to teach economic history. 1880s, 1890s, the railroads made it 10 times faster across the United States. We had this incredible productivity boom. It was the gigantic GDP growth and it was disinflationary. So imagine you're having double digit GDP numbers and inflation was minus two, minus three, minus four percent just because the costs were coming down. Then in the 1980s, under Reagan, we had what I would call a deregulatory boom because hard for everyone in this room to remember, but everything used to be regulated. You know, price of airline tickets, the telephone bills, banking services. So 1980s, we had a deregulatory boom. You know, Paul Volcker brought down inflation, but it was also the deregulation. 1990s, which I previously mentioned, we had had an electronic buildup. And then finally, it kicked in, especially in office work. And that led to a big productivity boom. And we paid down the national debt. We had a surplus.