00:00 Speaker A
You like Microsoft.
00:01 Speaker B
That’s right.
00:01 Speaker A
Now I had tech investor Dan Niles on the show. I was asking about Microsoft, no. I I no on Microsoft. I said, why Dan? He said, Satya Nadella does not have a leading large language model. That is a red flag, doesn’t belong in your portfolio. Why is Mr. Niles wrong?
00:17 Speaker B
Because they don’t need a leading frontier model.
00:19 Speaker A
Explain that.
00:19 Speaker B
For a couple of reasons. One is they have Open AI’s IP for free for the next seven years. So they can use it however they want, whenever they want without having to pay open AI. And two is the biggest part of the AI market is going to be open source. That whole discussion we just had about Kimi K3 wasn’t about China. It was about open source. We don’t need the most advanced model for everything we do in AI. Summarizing my emails doesn’t require a fable level model. And so an open source model which will come likely from Microsoft, from Amazon, maybe even from Meta will more than do the trick and that’s something Microsoft can sell at probably even higher margins than selling access to Open AI and Anthropic models. So Microsoft will participate in a huge way. They’re actually going to be the ones that provide companies with a control plane, an orchestration layer, a harness. These are all things that mean, hey business, don’t build on top of Anthropic and open AI. That’s bad news. Build on top of Microsoft. You already use Microsoft for almost everything. If you build your AI applications on top of Microsoft, if something bad happens to open Anthropic, you don’t have to worry about it because we’ll be able to swap that out. We’ll be able to give you access to open source which is going to be considerably less expensive than using the frontier models. So I actually think Microsoft and I love that Dan doesn’t like them and I love that they’re so hated. Those are the just like I jumped off the bandwagon for Google when it was too crowded, I’m going to jump right on the bandwagon for Microsoft and feel like I can luxuriate in it.
01:25 Speaker A
Let me ask you this. I got to here, girl cuz you just covered the hyper skills, you covered the chips. If I’m going to keep hearing big tech come out and they’re and then Nadella and Zuck, um and Sundar, they’re all going to keep spending and spending and spending. Is that just mean, okay, you know what, full full pedal to the metal on the chips? as a guy know, you like Micron, you like Nvidia.
01:37 Speaker B
I don’t like all the semi complex because there’s it’s there’s two types of semis right now. There’s semis where the valuation implies that the cycle’s going to go strong through 2030. That’s your AMDs, your Intels, your optical, your semicap, stuff like Cerebras. You have all these valuations that imply we have at least a five-year cycle. And then you have Micron and Nvidia where their current stock prices imply the cycle’s already over. So if even if we got just one more year of investment, those stocks are very inexpensive. So that’s we’re not we’re not recommending the whole semi sector. It’s very uneven right now. There’s a big dislocation between companies that are getting a lot of credit and Micron and Nvidia that are getting no credit.
