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0:00 Join us right now and we're thrilled to have them in exclusive wide-ranging interview. Brad Gerstner is here. He's the founder and CEO of Ultimeter Capital, a founder of Invest America, also now known as Trump accounts. Want to talk to you about that, all the conversations you've had with Elon Musk who just announced his plans to donate one share of SpaceX to every single child in America in 2027, which is a remarkable remarkable thing. We've talked about this for quite some time and I know it's been a lot of work on your side to to get this done. But before we even get into all of that, I'm just so curious where we all watched the SpaceX earnings last night.
0:36 >> Yes, extraordinary. Extraordinary. >> I I'm curious, what was the biggest thing you pulled out of that? And also want to get into what you feel or how you feel about a potential Tesla deal? >> Yeah, so it's great to be here. It was an extraordinary earnings call. I mean, I think the biggest debate in the market today is do we have enough capital? Do we have enough manpower to build out the data centers across the United States? So, think about the magnitude of what he announced last night. He said they're standing up 200,000 GB300s per month. Just a few months ago, that was what we were doing in a year.
1:11 He says he's going to do that every single month. By the end of the year, 3 gigawatts. He says they're going to stand up 10 gigawatts of compute next year. It's unheard of. The forecast for next year total compute being stood up in the United States are 43 gigawatts. So, SpaceX alone is going to put up 25% of the total gigawatts going up in the United States. The capital required to achieve this, right? That's like 400 billion dollars that's going to have to, you know, be raised to pay out that computer infrastructure. But it makes very clear, Elon understands we're at the brink of the singularity. We're entering super intelligence and whoever has the most scale, >> Right.
1:50 >> capital, compute, and data wins the game of super intelligence. >> So, he's going to have to raise an extraordinary amount of capital at this point. I mean, how does he do that? >> well, I think at the end of the day, he's he has better access, right? We we see the gyrations in the market for the subscale neo clouds, right? Coreweave is an extraordinary company run by a great CEO, a great team at execution. The problem is they're subscale relative to SpaceX. And then if you put SpaceX and Tesla together, I think one of the main motivations behind the merger, as somebody who owns shares in both companies, is they need he wants to get scale now. He wants to accelerate scale now because if you have scale around capital, and if you put the companies together, it's easier to borrow money, right? It's easier to raise money cheaper, etc. And you're going to need need to raise cheap capital to build out all this CapEx.
2:39 >> Okay, on the Tesla front, I'm going to make you a member of the special committee. >> Great. >> What kind of premium do you want for your shares of Tesla? >> Right. I think I Listen, if you look at a control premium, it's generally 20 to 30%, right, Joe? In these situations, but I think here >> I think it's >> Right? >> Let's do it. I don't know if it's >> it's Do you think it's going to be less?
3:03 I actually >> think you need any premium. >> Okay. The question is whether there's a premium already built into the stock here. >> there is. There's always a control premium. There's always a premium built into the stock. That's always taken under consideration. But I actually have a a slightly different view here. If I'm on the special committee of Tesla, I have a unique fiduciary duty because he's involved in both companies, right? In order to make sure this is fair for Tesla shareholders. I actually think they'll err on the side of a higher higher than 30% higher change of control here because they need to make sure they want to guard against the lawsuits that, you know, >> invariably >> invariably come. And they want to make sure that they have it. So, if you go above the market rate, right? If you're above 30%, it really does insulate you, I think, from a lot of those things. And it doesn't have to be from today's price because there's part of the change of controls already built in. The merger premium is already built in. But I think you're going to see something between, you know, 420 bucks a share and let's call it 520 or 550 bucks a share. That's my best guess as we sit here today.
4:03 >> of Space X. >> Correct. >> I just want to go back. You mentioned CoreWeave. And we've been talking about these neo clouds and there's been a lots of question marks even in the past week or two about what's happening there. >> when you listen to Elon Musk last night, you'd think to yourself, "Oh my goodness, there the demand >> Yes. >> out of control, we shouldn't be worried at all." And yet the market doesn't seem to necessarily share that view.
4:27 >> Right. Well, remember when people make comments about demand, it's spot pricing. It's the demand that exists in the world today. But the market, when I'm loaning you money or I'm investing in your equity, I have to apply a discount rate to what I think's going to happen in the future. And the reality is nobody knows what the demand is going to be in 12 months. Most of us who are in the game are saying this is accelerating. We're forecasting that demand's going to accelerate. But of course, there's a distribution of future unknown probabilities. It might accelerate or there's other versions of things that can happen in the world where that demand would decelerate. And so people need to get paid a risk premium, right, for making that. And when you're investing in somebody who doesn't have a lot to collateralize other than the GPUs, right? And let's be clear. Jensen understands the fungibility of his GPU.
5:14 It's a lot easier to underwrite a GPU coming out of Nvidia because I can a lot of people can use that GPU. Custom ASIC, much harder to underwrite the financing on that. So depending what's going into CoreWeave's data centers, and you know, Elon's almost exclusively on Nvidia. Again, an easier financing GPU. >> Let me ask you, you know, from a policy perspective, we keep talking about this country's going to spend trillion dollars potentially a year right to keep this going.
5:40 And that's extraordinary. Yeah. And most of the spoils of that are going to the suppliers. you know, the margins at Nvidia's 75% last quarter. You look at Micron, you're talking about 86% margins. This is not normal. >> Yeah. >> And that's a result of a shortage. I'm not suggesting that there is gouging taking place. I'm just wondering when you look at the competitive landscape, typically when you see margins like that, that's like a a siren call for competitors to come into the space to try to bring down the cost.
6:11 >> Good question. >> That By the way, that siren's been going off since 2023 and we're still here. >> That's right. >> So, how quickly do you see a shift there? >> Yeah, I mean, like listen, I've been doing this podcast BG2 with Bill Gurley over the course of last couple of years and that was the question we asked for 2 years. When does the supply shortage turn into a glut? So, the people who've called right the glut over the last 2 years, they've all been wrong and they've all missed the opportunity the upside. At some point they'll be right, but I would stipulate they'll miss all they missed a lot more money to the upside. You missed all of that because you were panicked 2 and 1/2 years ago that there was going to be a glut. I actually think you have a natural constraint here. There's only so fast in terms of production of wafers in this country. It's only so fast that we can bring power on. So, it's very different than what we saw in 2000. In 2000 we had constrained demand. Today we have unconstrained demand for super intelligence and we have limited supply because we have physical constraints in how quickly we can bring the supply on board.
7:10 >> I want to flip back to space for a moment and then we'll get to Elon and some of this gifting, but one of the questions I have about Starlink. We were watching the shares of AT&T this morning which had its earnings. By the way, pretty good quarter all things considered yet the stock is getting hammered hammered in large part because there's a view that Starlink is going to just obliterate all of these telecom companies. >> Yeah.
7:35 >> Do you think that they can obliterate all of these telecom companies and do you think that one of them breaks and effectively sells themselves to Musk? And by the way, is that a good deal for Musk? And the reason I ask that is given the multiples these companies operate at and the CapEx that's required, I assume that, you know, and that's that SpaceX has a much higher multiple. >> highly accretive if they were to do that. What I would say is this.
7:59 first again, I'm not surprised that your reporter earnings and your stock goes down because the market doesn't really care about what your earnings are today. They're saying there's this massive disruption coming to your business, right? And so your discount rate has to go up. Your multiple has to come down. And there the market's not saying with certainty that SpaceX will take you out. It's just saying the probability that they're going to be able to compete with you has gone up dramatically. What I would say is this. I think the probability that we're all going to have SpaceX as a alternative carrier and that they're going to have very fast diffusion, very high penetration in this country and around the world has gone up dramatically. I can't wait to switch, okay? Just as an end of one. I live in the heart of Silicon Valley, the most technology forward place in the world, and every morning on my way to the work I have two two dead zones, okay? So we all experience this. Why in 2026, 20 30 years after the invention of this device, it hasn't got much better in terms of our coverage? We're all frustrated by it, and so we are all going to be switching.
9:00 >> a man on the moon, but my mobile phone doesn't work in the desert. That's all horrible. >> the right >> You deserve that wherever you are. >> Yeah, no, I think that they're going to do amazing >> things. I know there's a lot of beef out there. Do they have the towers? Will they acquire that? >> Right, can they get through the walls? All of that. >> This is the best engineer in the world fully committed to this. This free cash flow is going to fund super intelligence. They already have solved most of these problems in the lab, on their road map. I have no doubt that they will solve this problem and that we will have this choice in the very near future.
9:31 >> Don't they argue there's a physical constraint? I mean, there's engineering and there's physics, right? Right? I mean, some physical things you just can't get around. >> Kind of like catching a rocket falling out of the sky. >> no. Like, going faster than the speed of light. >> I've heard about the physical constraints for a long time. When I hear these things out of the traditional carriers, it's classic innovator's dilemma. If I have this business that's just, you know, spitting out all this free cash flow, right? I want to I want to convince myself and others that it's very hard to do what we do. I'm just telling you, this is not the hardest problem that Elon is solving. Okay.
10:04 >> I'm going to throw out what I think may become Elon's the hardest problem Elon's going to have to solve. And that is the story this morning that we're all reading about that relates to Ukraine and Starlink, and the idea that he, not the White House, may have been the one that throttled this, potentially based on the terms of service for the commercial service, which says that you can't do offensive things with with the service. This is different than Starshield. I know there's been a lot of questions about I think there was some a confusing tweet that he put out that seemed to suggest it was POTUS cuz Starshield Starshield is run by POTUS effectively, but Starlink is still run by him, and it may be that Ukraine was running its operation over the commercial service of Starlink.
10:48 >> Mhm. >> It seems to me that if Democrats win the House and possibly the Senate, >> Mhm. >> there are going to be hearings after hearings, and Elon Musk, the great engineer, is going to spend a lot of time with his left hand up answering questions. And how you think about that? >> Yeah. >> as an investor. >> Well, first, you know, I don't know any of the details about what went on or what didn't go on. but I think it's a legitimate right in a democracy that people say, "Hey, we you know, we want our government making the decisions for us, not individuals in terms of our foreign policy." And and so, my hunch is that it was the government making the decisions, our Department of War, the president, or what have you. But I don't know the facts, so I'm not going to comment on the facts. What I would say in the alternative is, and I've talked with, you know, many members on both sides. I hope for the sake of the country, right, that if Democrats regain control of the House or the Senate, that we don't spend the next 2 years, right, in prosecutions and persecutions. We have way too much to get done in this country. There's a way too many areas of common agreement between the two parties. If there are egregious things that went on, then of course every party should pursue those things, but I really hope if you end up with a speaker Hakeem Jeffries, we're not involved in 2 years of just battling it out, in investigations, but in fact we get stuff done that the country want wants and needs to have done.
12:06 >> one of the things that I think the country wants and needs to get done is to figure out the retirement problem in America, and that's something you've been trying to solve, and I think you might have made a major dent in this issue with Trump accounts and Invest America. >> Just take us behind the scenes because I know you've been working We've been sort of talking about this for for months on the air, but behind the scenes you were trying to convince and persuade people like Elon Musk to donate these shares. I imagine he's going to do that >> Correct.
12:35 >> through Trump accounts. That I think is the concept. He didn't say that directly. >> He confirmed it. Like that's happening. what I would say for first, I was on this set 3 and 1/2 years ago >> Right. >> right? In fact you guys in many ways gave me the boost and the credibility we needed to continue the forward momentum because you reported on the forward momentum that was occurring with the CEO Council and everything else. So let's just like restate where we are. We have 70 million open accounts in America. The vast majority of their those are funded or going to be funded. This is a free lifetime investment account, a universal capital account that can compound for life in the upside of America for every child. I'm here because of Robin Hood New York, a poverty relief organization run by Paul Tudor Jones. They do incredible work. Just in New York City we have 2 million accounts that have been opened with $500 million in them waiting to be claimed. So, if you're a parent in New York City, you need to go to Trump accounts dot gov or go to the app store, download the app, and just verify your identity, change your your password, and get your free money, and get your kids on the path to financial security. Just today in America, there going to be 10,000 kids born.
13:46 And today in America, we will create 10,000 accounts, and we will put $1,000 in every one of those accounts. And tomorrow, there going to be 10,000 kids born, and we're going to create 10,000 accounts and put 10,000 bucks into those accounts. Tomorrow, we're going to adopt a school up in the Bronx. I'm going to add $250 into the accounts of the kids in that school. And what I want everybody in New York City to do, you know, poverty relief is a you know, is is like a local effort. We got to get families engaged. New York City is the best at this. We ought to have borough captains in all five boroughs of New York City that are making sure every school gets sponsored, every kid gets sponsored, that we add to those accounts. So, I think there's amazing stuff that's going to occur here. but when we when we talk about what Elon has done here, one share for every kid in America, and remember, in his tweet, he said this is the first among many.
14:35 So, a lot of people sit on this side, and they say, you know, they talk about all the bad things of people accumulating wealth. You know, Elon's paid more taxes than anybody in the history of the country. I pay 53% all in taxes in the state of California. It's part It's a feature of the of the system. I don't complain about the 53% taxes I pay. This country's been built on reasonable taxes, limited government, and innovation. We ought to keep that, okay? All I'm saying is on top of that, we're also the most generous country in the world. So, I've been talking to Elon along with every major tech CEO and founder in the country, and I'm telling you, Elon is the tip of the iceberg. This is the most giving country on the planet. I told the president, I think I can raise $100 billion over the course of the next 12 months to sponsor all the kids in America with the best companies in America, get them on the on the road to compounding in the upside of America. It gives them hope, Andrew.
15:29 >> Take us behind the scenes in terms of just convincing though Elon >> Yes. >> to do this. >> Yes. >> And when that conversation began, the idea of there is a whole period, 5 years, and how important that was either to him or to others as you were discussing this. >> Yeah, so I I I mean the conversations My dream was Warren Buffett, right? He's my hero investment hero. My dream was him donating a share of Berkshire This is years ago. Donate a share of Berkshire Hathaway to every kid in America. We'll call them Buffett accounts. That'll be your legacy. It's like tie it up with a bow. It's the best You know, but think about Warren Buffett. He never wanted to sell sell a share of Berkshire Hathaway.
16:05 Sam Walton never wanted to share sell a share of Walmart, right? They've compounded in the upside of their own company. So, psychologically, they don't want to sell their shares. They just want to give the shares to the kids, but they want the kids to have the power of the compounding in the shares. Elon wants every kid in America to watch the Starship launches that are going to be occurring every day knowing that they're a part owner, you know, in SpaceX. And so, that is important to the psychology.
16:29 I told the president and I told the Treasury Secretary, we can't unlock the great philanthropy of the country unless, right, we take advantage of what the Congress intended, which is that Treasury has the discretion on gifts to say that you can do it in stocks. So, that's what the the rules allow. The 5-year holding period was us trying to strike a reasonable balance. If you're 17 years old, you only have a 1-year holding period. If you're 16, a 2-year.
16:53 If you're 15, 3-year. If you're under 12, you have a 5-year holding period. It's not as long as the donors wanted the holding period to be. Heck, they would have rather it was held for 18 years, but it's also, you know, helps the kids understand the power of compounding. >> There's been some talk, and I think you're working behind the scenes to maybe add or shift some of the rules again so that it could extend to over 18. Is that the idea?
17:16 >> Yeah, so I That wouldn't be a rule change. You would have to get a congressional, you know, change to the legislation. but this has been one of the most successful changes to our social contract in 100 years. It's wildly popular. Kids are not Republicans or Democrats. They just want to believe in the American dream. So, on both sides of the aisle, there's wild support for this. So, there are a variety of things we need to do. Stock as a gift. We want to like make make some clarifications on that. Legislatively rather than >> codify that in legislation.
17:47 >> rather than just through rule making. And there's a push that I I agree with that you could expand. You could effectively pull forward 20 years of Trump accounts. Remember, at 18 it automatically turns into an IRA. >> Okay. >> So, every year 3.7 million IRAs will be created as kids who are 18 age up like my child. >> Right. >> Okay, they they become IRAs. So, why not pull forward 20 years of IRAs? We can create all of those today. Everybody under 40. We're not putting money in them from the government, right? But you just create the account so that they can get saving too. And if Elon says then I want to give to everybody under 40, or you know, or OpenAI says I want to give to everybody under 40, there's a vehicle, there's a vessel that they can start compounding in. And there's lots of innovation. We already have the Savers Act for the lowest income Americans.
18:36 >> Right. >> Congress has already allocated money and said for the lowest income Americans, if they have an IRA and they put a little money in it, we'll match it. So, those are the types of things we're working on. >> we only got a a couple minutes left, but and I wanted to ask you about Anthropic because the IPO is expected probably sometime next month. >> >> We've seen some of the numbers coming out from the prospectus.
18:59 >> Yeah. >> Do you think this goes at $2 trillion? Do you think it goes at $1.5 trillion? Do you think it goes at less? Does it matter? >> Well, I I I'll say this. I was at the investor day, you know, in San Francisco last week. 150 of the leading investors from every mutual fund, long only, you know, hedge fund in America were there. there was a lot of energy, you know, that day. I would say the sentiment coming out of the room, by my measure, was like a 10 out of 10. Right? What we heard were incredible things. We saw what was in the product pipeline. The competitive moats were expanding. The amount of compute they're bringing on was really powerful. So, those are the things investors care about. And by the way, last quarter, they the there's lots of stories out there about them being cash flow positive. So, it's not like they're hammering, you know, this is a high-growth company with incredible earnings that's also fairly profitable on a per token basis. but if you apply to a 10 times multiple to that, Andrew, you get to 1.5 trillion. If you apply a 12 times multiple, you get closer to 2 trillion. So, I think that's the range that we're talking about.
20:00 >> All right. OpenAI, apparently trying to raise some money right now ahead of this. I think trying to benefit from capturing whatever's happening with Anthropic. Do you Do you see them definitively going public in 2027? >> I would say, from my perspective, it's highly probable they go public. Remember what I said at the start. Why is Elon talking about merging SpaceX and Tesla? Because we're in the foothills of the singularity. Things are accelerating. They all want to get to super intelligence first. It's recursive, right? When you build enough compute and you get into that recursive loop, you extend your lead over your competitors.
20:35 So, it is a real battle and a real race, but it's a lot of capital to get there. So, I think SpaceX is or I think OpenAI's going to need access to the cheap capital, which is why you want to go public. I've encouraged all these companies to go public. It's better for America when all retail shareholders in America are compounding in our most important companies. So, I think they will get there. I think there's a lot of enthusiasm. And by the way, if you look at the multiples, the multiples we're talking about these companies coming public at are lower than where Facebook came public, lower than the multiple Google came public, lower than the multiple SpaceX came public. So, I think there's already a wall of worry built into these companies.
21:11 >> I I mean, we're that close to the recursive and the the >> Yes. >> end of the singularity, and you think this two-page document protects us from that? >> Joe, I thank you for bringing that up. Of course, I was at the White House for that event. I've been deeply involved in the safety and regulatory regime in Washington. We don't have just a two-page document. We have the most robust regulatory scheme in the world. We're the only country in the world that sanctioned a model and actually pulled it off the shelf using export controls.
21:40 So, let me quickly, it's a three-legged stool. The first leg on the stool is the Commerce Department Casey reviews every single frontier model before it's released in this country. Why have we slowed down the rate at which we're releasing frontier models? Because they're all subject to pre-review, and the administration is not going to allow a reckless or dangerous model to be released. Secondly, we have the White House Accord on superintelligence. Internal audits, external audits, board oversight. That's like a Sarbanes-Oxley liability regime for the companies themselves. And then the third leg on the stool is what we call the SI force led by Jay Clayton, right? Emil, Scott, et cetera. That is for critical industries and cyber, and they're doing incredible work. So, this is really robust, and we set it up in record time.
22:26 We could have waited a year for Congress to try to hammer out a bipartisan agreement on what we were going to do, but within the next year we're we're at AGI. This needs to happen now, and so I'm I'm actually thrilled. >> We're at AGI. >> We're at AGI. AGI is just smarter than Remember, AGI is just smarter than any one human. This is way smarter than you, Joe. >> I've been waiting for this for 20 years reading Kurzweil. When when can I download my brain onto a chip so I can live forever?
22:53 >> Yeah, I I I mean, listen, I hope for me, you know, there's a there's a there's a there's a difference of opinion. I don't want to be down I don't want to download my consciousness to a probe. >> I think that we need to be very careful how we train the constitutions, right? Of of these models. I'm pro-human. I think humans should stay in control. I think we need to train the models that humans stay in control and they're subject to the conditions that they control.
23:18 >> for like 500 years. Is that possible? >> I you know, listen. E- E- E- Elon's Elon and others, people who are way smarter than me on this, Larry Page, etc., will tell you that it's not it's not as far off as most people think. and so, you know, I think our obligation, here's what I'm focused on. >> Right. >> I'm only going to do what I think is it is going to create a better world for my kids and all the 25 CEOs around that table with the president. We had the conversation. We all have kids. We all care deeply about the country. We don't need to go at breakneck speed. We need to go as fast as we possibly can while being safe.
23:54 >> Okay, I got one final one for you. It actually relates to charity. So, here you are doing this great work for Robin Hood. Trump accounts is a charity vehicle of sorts. And yet, Anthropic and OpenAI are approaching charity, I think, almost completely differently through these B Corps and this idea of creating foundations. How do you think about that in the context of the work you're doing? >> Yeah. So, so first, you know, I think we've created the most disruptive charitable platform, direct charitable platform, in the history of the country.
24:26 We're going to see trillions of dollars of bequests and other things flow through this platform because the reality is America is the most giving country on the planet. People want to give. It was just too hard to give. Right? Most people don't know foundations and the charities to give their money to. And or they have so much money like Elon, it's not an efficient way to distribute their money. Now, with a single-page donor agreement with the US Treasury, you can sponsor any zip code in America, any state in America.
24:52 You can slice and dice it the way you want to get the money directly to kids cutting out the middleman. When you talk about Open AI and you talk about Anthropic, it's perfectly consistent with this, Andrew. And by the way, stay tuned. I think both of them will be contributing. In fact, in the Anthropic document that Elon was responding to, when he said, "Give it directly to citizen accounts. I'm going to do the same." In that document, Anthropic said, "We're creating this this 5% funding could be worth as much as a hundred billion dollars. And one of the ways in which we're going to spend that money is directly to citizen accounts of specified populations."
25:28 Which is exactly what Michael Dell did. Which is exactly what Gwen Schotland and myself and Ray Dalio and others are doing. So, we've created a vehicle where you can give directly to kids. We know more likely to graduate, more likely to start a business, more likely to buy a home, less likely to be incarcerated. It's the highest social ROI of any investment we can make in the future of the country. And I'm so grateful to Elon and to Gwen and to Michael and Susan Dell and to the others who stepped forward. They're the pioneers of a movement. This is giving pledge 2.0, where we actually give the money. Right?
26:02 We don't just pledge it. We give it and we give it directly to America's kids in a way that can compound aligned with the upside of American capitalism. This is pro-capitalist, pro-free market, and also incredibly charitable. >> Right, Gerstner. Thank you. >> Great to see you. >> We appreciate Thank you, Kevin. Pretty great. >> I'd be a little more excited next time if you really want to sell people on it. >> You're amazing. You're amazing. People are going to get blown away whenever you're on.
26:29 >> I'm just looking at Twitter and I'm like, "This guy's the best." anyway, thank you. All right.