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Bitcoin Is Waiting On One Thing Before Institutions Go All-In — Transcript

by Anthony Pompliano · 8,043 words · 1,217 segments · language en · Watch on YouTube

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0:00Digital currencies have been a wild ride
0:03in my world for like five years now. I
0:06would say institutions have been curious
0:09about this for a long, long time. I
0:11think generally speaking where, you
0:13know, five or six years ago,
0:16there was a huge percentage of them who
0:17just thought Bitcoin is snake oil. Like
0:20this is not real. This is never really
0:23going to be an investable asset class.
0:25That has completely changed.
0:27I would I don't really know anyone who
0:29says anything like that anymore. I think
0:31people now see that it is a completely
0:33legitimate asset class.
0:35>> What's going on guys? Today we have an
0:36excellent conversation with Ron
0:37Biscardi. Ron is the CEO and co-founder
0:40of iConnections. It's one of the largest
0:41platforms in the world where
0:43institutional investors come and talk to
0:45fund managers. The reason why that's
0:46interesting is Ron has got his ear to
0:48the ground when it comes to what is
0:50going on with this dark money, the
0:51institutional capital. How are they
0:53thinking about Bitcoin, artificial
0:54intelligence? What's going on with
0:56things like SpaceX, Anthropic? Are they
0:57excited? Are they not? How about private
0:59equity, private venture capital? What
1:01about private credit? All of these
1:03things Ron has unique insights into and
1:05he shares it with us today. And then we
1:06talk about this massive event that Ron
1:08is putting on in Austin, Texas. He's got
1:10Jensen Huang, David Solomon, Mark Rowan,
1:12and a ton of other great investors that
1:14are all going to show up. I think you
1:15guys are going to learn a lot from this
1:16conversation and it's going to get you
1:17excited because this is one of those
1:19rare moments where we pull back the
1:20curtain, we get you in the room with
1:22people who have a lot of capital and you
1:23usually don't get to hear about and
1:25Ron's going to tell it all to you in
1:26this conversation. Here's my
1:27conversation with Ron Biscardi.
1:29All right, Ron, I think the first place
1:30that we should start is you got a very
1:32unique seat in the industry. You get to
1:34see what is going on with the
1:35institutional capital. This is kind of
1:36the dark money behind the investors that
1:39people see on TV every single day. Not
1:40dark in the sense of nefarious, it's
1:42just that they are putting their capital
1:44into the hands of these investors. The
1:45investors are then going and they're
1:46allocating to venture capital funds,
1:48private equity, uh or excuse me, venture
1:50capital companies or uh private equity
1:52companies. And so what are those people
1:54talking about right now with the impact
1:56of the midterms? We're hearing what the
1:57investors are saying, but like what is
1:59the who actually control the money? How
2:01are they thinking about this?
2:03>> So,
2:04it's interesting you said dark money,
2:05and I agree with you. It is
2:08it's incredibly opaque, right? The
2:09average American doesn't really have any
2:12idea
2:13what goes on in the world of
2:16institutional investors who, by the way,
2:19are mostly focused on some level of
2:22either philanthropy or retirement
2:25savings, right? You have sovereign
2:27wealth funds that are built to benefit
2:29countries. You have pension plans that
2:32are obviously benefiting people in their
2:33retirement. You have endowments,
2:36foundations, and honestly, even in the
2:38family office category, which are
2:39individuals who've had a lot of success
2:43and and are now managing their wealth,
2:45the vast majority of those also are
2:48primarily focused on whatever their
2:50legacy is going to be, and that always
2:52involves a lot of philanthropy. And, you
2:54know, it gets to things like the the
2:56giving pledge and things like that. So,
2:59that whole universe
3:01deploys capital into the funds that we
3:05hear about occasionally, right? You'll
3:07see them on CNBC, venture funds, private
3:10equity funds, private credit, real
3:11estate, all of those things. Those those
3:14groups manage the capital for that that
3:18first group I mentioned and generate
3:19investment returns so that they can do,
3:22frankly, a lot of good in the world.
3:25What's the impact and what am I hearing?
3:27You know, it's obviously early, but the
3:29general chatter I've heard is a lot of
3:32anxiety. First, no one's surprised
3:34because, you know, I think pretty much
3:36everyone saw this coming. The the polls
3:38were were
3:40I think the polls this time were
3:41actually right.
3:43There is a lot of anxiety about what it
3:45will mean for AI. AI is the engine that
3:50has been powering the stock market. It's
3:52the many people believe the future of
3:56America is now really connected directly
3:59to the success of our AI industry. And
4:03what powers AI are data centers. And to
4:06the degree this result results in
4:11a lack of data center construction,
4:14most of the people in my world believe
4:16that would be very very bad for the
4:18country. Data centers are the heart of
4:21what makes AI possible. And any slowing
4:25down of that of the construction of
4:28these facilities, it just gives China
4:31and frankly, you know, any any other
4:33country who wants to be competitive in
4:34this space a huge advantage over us,
4:38which, you know, in my opinion would be
4:42a really bad thing for the future of the
4:43country.
4:44>> Now when we go and we look, I think
4:46Texas maybe is the area that people have
4:47spent the most time on. You've got a
4:49Democrat governor who is now the elect.
4:51She has been pretty open about wanting
4:54to create this moratorium. What's
4:56interesting to me is there's nuance
4:57here, right? We obviously have the
4:59outgoing governor. There is like maybe a
5:02pause. It's not like a true moratorium
5:03where they're not going to go and and
5:04create more, but there is this like
5:06slowdown intentionally being done by the
5:08government. And Texas is important
5:10because there's a lot of data centers
5:12that are supposed to be built there. I
5:12think something like 13% of all data
5:14centers planned in the United States
5:16just in the state of Texas. And so when
5:18I look at that, it almost feels like
5:21less of like a zero to one, hey, we were
5:22building tons and now we're going to a
5:24complete moratorium, and more of this
5:26like, okay, there was already a slowdown
5:27happening and now we're going to get an
5:28extension from a timeline perspective.
5:31And that continued slowdown or like the
5:33the belief that there is going to be a
5:35longer pause or slowdown is really
5:37what's giving people some heartburn. Now
5:38do you think that those data center
5:40providers or builders that maybe don't
5:43yet have broken ground or haven't
5:44actually gone and started, they're just
5:46like, well, let me pick up from Texas
5:47and let me go to, you know, some other
5:49state where maybe they're a little bit
5:51more open to these data centers? Or does
5:53it feel like they're just going to wait
5:54it out and they say, hey, maybe it's
5:55going to take 3 6 9 12 months, but I'll
5:58still build the data center. I'll do it
5:59in Texas. It's just going to take a
6:00little bit longer?
6:02>> Yeah, it's a great question. I feel like
6:04the for if, know, if you're in the data
6:05center construction business, it's like
6:07your options just keep shrinking, right?
6:10There were there were I mean, the
6:11biggest cluster of data centers is
6:13actually Northern Virginia, um where,
6:17you know, for years data centers have
6:19been built there and really
6:21successfully. It's actually been a huge
6:23benefit to the counties in Virginia. You
6:26know, they've they're it's one of the
6:27few spots in the country where they were
6:28able to lower real estate taxes because
6:31the data centers have provided such huge
6:34tax revenue. Um so my guess is I mean,
6:37look, this AI thing is moving at an
6:40incredible pace, right? I mean, every,
6:42you know, we've been watching for the
6:43last two or three years, every time a
6:45new model comes out, it leapfrogs the
6:48the the capabilities of the model that
6:52came out a month or six weeks earlier,
6:54you know. So it it's an industry that
6:57has to move really, really fast to
7:00remain competitive. So my hope is that
7:03at least the data centers that have
7:05already been permitted
7:06are not going to be slowed down, right?
7:09If they've already gotten governmental
7:10approval, let those move forward. And by
7:12the way, Texas is an enormous state with
7:15a tremendous amount of real estate and
7:17it's the center of our energy industry.
7:20So what do you need to run a data center
7:22successfully? Lots of energy. So here
7:24you have the center of the oil and gas
7:26industry for our country. Um putting the
7:29data centers there makes complete sense.
7:31There's a tremendous amount of open
7:33land. So, you know, it's one thing if
7:35you said, hey, I want to start dropping
7:37data centers into metropolitan areas.
7:40Um that I totally understand can create
7:44a whole bunch of issues that people
7:45don't want to deal with. But if we're
7:47going to start slowing down data centers
7:50in, you know, vast open areas of the
7:52country, I just don't understand the
7:54logic behind that. So I hope that they
7:58that the way the incoming administration
8:00in Texas will approach it is to make
8:03good logical decisions for the industry
8:06and for the good of the state and the
8:08country versus just capitalizing on what
8:11is become a political issue. Um, I I
8:15suspect that the folks who have not been
8:18permitted yet are absolutely going to
8:20start looking at alternatives. I'm not
8:22really sure what the best alternatives
8:24are. I guess we'll start to see what
8:26shakes out and which states kind of
8:29raise their hand and say, hey, we'd love
8:31for you to put your data center here.
8:33Um, but yeah, my guess is if they drag
8:36their feet, I think that this industry
8:39is just moving entirely too fast.
8:41They're not going to they're not going
8:42to sit around for 12 months to wait and
8:44see what happens. I think that I think
8:46in AI years that's like an eternity.
8:49>> Well, you know what's funny is um
8:51obviously Elon Musk, SpaceX has talked
8:53about doing these orbital data centers.
8:54I think at first it was kind of a joke,
8:56then all of a sudden it was like, well
8:57maybe we can do this. Now they are
8:59betting a portion of their company on
9:01being able to actually build, launch,
9:02and uh and operate these. Uh but when
9:05you see this, um it kind of almost feels
9:07like that's the natural conclusion. Well
9:09like if the people on Earth are going to
9:10give us a hard time, we'll do it off the
9:13Earth, right? And
9:15Look, I don't know. Maybe it's better,
9:16maybe it's worse. You know, there's all
9:18kinds of trade-offs in terms of the
9:20latency or you know, all of a sudden
9:21there becomes a a lot of space traffic,
9:23you know, which is something people
9:24don't yet talk about, but I think it
9:25will become a big big issue. But from
9:27that perspective, like is that a kind of
9:29what happens? It's just entrepreneurs
9:30figure out a solution regardless of what
9:32the politicians do?
9:33>> Oh, I I have no doubt that that the
9:36engineers at SpaceX are working triple
9:39time to figure out how to get data
9:42centers uh
9:44like working in orbit as fast as
9:47possible because
9:48Tesla's Tesla and SpaceX, their entire
9:51future is tied into the success of AI. I
9:55mean in a in a major way. I mean I own a
9:58Tesla. I own a Model Y. I absolutely
10:00love this car because I don't really
10:02drive anymore. This self-driving is so
10:05amazing. I literally get in the car, I
10:07hit the self-drive button, it takes me
10:09where I need to It's definitely a better
10:11driver than me. It has 360 vision. All
10:13of that's happening because of AI. And
10:16as more and more people use these tools,
10:19um it just creates greater and greater
10:21demand. So I'm sure that SpaceX is going
10:24to do that. By the way, there's really
10:26not a latency issue. There's actually
10:28much more of a latency issue in the
10:31terrestrial like if you think about the
10:33cell phone system, the number of hops
10:36that your call has to get through and
10:37the number of devices is enormous
10:40compared to what it would be if you were
10:43end-to-end through the SpaceX network
10:45that they've they've talked about
10:47building. So, you know, especially with
10:49the laser technology, they've already
10:51demonstrated they can
10:53they know how to do in the current
10:55Starlink network. Um I don't think
10:58latency will be a problem at all. Uh
11:00there's a bunch of other engineering
11:02issues they have to figure out, but I I
11:05suspect if if they can get that working
11:08in the next three years, call it, I
11:11think it becomes a serious competitor
11:13because once you get it working, now
11:15it's just a matter of how fast can we
11:17build these satellites and launch them
11:19into space. And with the Starship
11:21platform getting closer to becoming a
11:23production vehicle, they'll be able to
11:26launch. I I think one Starship can put
11:29up the equivalent of like three Falcons
11:32worth of satellites. You know, they'll
11:34be deploying I think it's around 100
11:36satellites per launch. And if he can get
11:39Starship launching as frequently as
11:41Falcon, which is right now, I want to
11:43say they're doing about 100 110 launches
11:46a year.
11:47Um tripling the capacity on each one of
11:50those launches would really make SpaceX
11:54a serious competitor in that space. So I
11:57I have no doubt that they are working
11:58overtime to solve that problem.
12:00>> Let's keep talking about these
12:01institutional investors and kind of how
12:03they're feeling about the market. If we
12:05stay on the AI theme before we get to
12:06maybe crypto or other things, what about
12:08Anthropic? Anthropic was supposed to
12:10come out at 2 billion or excuse me, 2
12:12trillion with a T.
12:13Uh and now they're going to come out at
12:141.5 trillion or so. We saw OpenAI, they
12:17were going to raise 30 billion. Now it
12:18looks like they're going to try to raise
12:1920 billion. Are Are these companies kind
12:23of cooling off a little bit? Are
12:24institutional investors souring on them
12:25in any way or they just as excited
12:27about, you know, the leading large
12:28language model labs?
12:30>> Well, I'll say this. The The You know,
12:32the market is moving so fast. It's
12:34always hard to know where exactly where
12:35the sentiment is and you know, you've
12:37seen a little bit
12:40uh I would say more concern in the
12:42market as to whether or not we're in a
12:44bubble and how close to the bubble
12:46bursting if we are in a bubble. Um but
12:48then this selection result I I think
12:50primarily as a result of what will now
12:52be divided government um
12:55sent the stock market, you know, on a
12:57tear yesterday. So um it it is hard to
13:00really know, but I can tell you this.
13:02Venture investing, which is where
13:06Anthropic sits, right? They They were a
13:08venture-funded company.
13:10Venture funds have had an incredibly
13:12hard time. The top top funds, this
13:14doesn't apply to, the top funds can
13:16pretty much always raise money. But as a
13:19as an asset class, venture has had a
13:22really hard time raising money for
13:24really the last three or four years and
13:26it's primarily because their funds
13:29couldn't achieve liquidity on the on the
13:32investments that they made, even the
13:34ones that were really successful. I
13:37mean, SpaceX is actually a great example
13:38of this. SpaceX is about 20 years old.
13:42So here you have this company that in
13:44any other era of our stock market over
13:46the last 100 years would have gone
13:49public like 15 years ago probably. Um
13:52didn't go public because of the the
13:55change in our public markets and this
13:58whole process and and also the
14:00availability of capital in the private
14:02markets has been so much larger.
14:05Companies are just staying private much
14:07much longer. But what it's created is um
14:11a lot of anxiety for the institutional
14:13investors who are used to You know, if
14:15you're an institutional investor and you
14:16like your venture fund and you you
14:18generally invest, call it $10 million
14:21per fund,
14:22what you're counting on by fund three
14:24and fund four is that funds one and two
14:27are starting to exit their investments
14:29and you're taking the cash flows from
14:31those investments and you're recycling
14:33them back into the future funds. Well,
14:36if those cash flows don't materialize,
14:39you know, now you need to find other
14:41sources of cash. You know, if you're a
14:43pension fund, it's the retirees or not
14:46the retirees, it's the future retirees
14:48who are paying into the plan. Um
14:50wherever your cash flows are coming
14:52from, they're not coming from your
14:54investment portfolio. That has been a
14:56huge issue which really hurt the ability
15:00of, I would say, illiquid funds, private
15:02equity, private credit, and uh
15:05maybe not private credit as much because
15:07they do cash flow more. But venture, I
15:10think, was the most hurt by this
15:12dynamic.
15:13And we saw at our our cap intro events
15:16over the last three years, venture funds
15:18had the hardest time even getting
15:20meetings with institutional investors
15:22because they felt like I can't keep
15:24putting as much capital into this
15:26illiquid
15:28asset class that doesn't return money
15:30fast enough to me. Well, with the year
15:33we've had in the IPO market with SpaceX
15:36obviously leading the way, that whole
15:38dynamic shifted dramatically. And And I
15:41saw it literally across two events. One
15:44I held in late February where venture
15:47funds really really struggled to even
15:49get meetings. Then I had another event
15:51in New York in June. Completely
15:54different scenario.
15:55Venture funds were the bell of the ball.
15:58They got a ton of meetings and we saw
16:00wow, there's this huge renewed interest,
16:03obviously very much tied to the timing
16:05of the SpaceX IPO, I'm sure. So I think
16:08with Anthropic going public, my
16:10expectation is that that momentum that
16:12started mid-year should absolutely carry
16:15through. Um and And we are seeing it in
16:18another event that we're throwing in
16:19Austin in a couple of weeks, where um
16:22we've got thousands of people coming in
16:23to meet with tech CEOs. So I I do think
16:27there is still tremendous interest in
16:29Look,
16:30if you want the best investment returns,
16:33you have to be a tech investor,
16:35generally speaking. There are pockets
16:37where, you know, really smart investors
16:39create other strategies that may perform
16:42for a period of time, but generally
16:44speaking, the best investments in
16:46history have come from technological
16:49innovations driven by companies like
16:52SpaceX and Anthropic. So my expectation
16:55is that this is this is going to run a
16:58fair amount longer. Another I I'd say
17:01difference in the uh
17:04in this particular era of tech investing
17:07is that these AI companies
17:09are generating tremendous amounts of
17:12cash flow or or I should say revenue. Um
17:16Anthropic's revenue growth is like
17:18nothing we have ever seen from any
17:21company in the history of business.
17:23Uh
17:24that's really really unique. You know,
17:26I'm a I'm a business guy who grew up in
17:28the dot com era and I remember, you
17:31know, to this day
17:33how we would meet companies that had no
17:35revenue,
17:37really no customers, but they had a ton
17:39of eyeballs hitting their website and
17:40they were raising, you know, millions
17:42and millions of dollars.
17:43You in the midst of that, a lot of us
17:46were looking at it saying like this is
17:47crazy. Like this has to be a bubble.
17:49This can't go on forever because sooner
17:51or later you have to generate revenue to
17:53survive as a business. That's not the
17:55case in this AI
17:57uh era. You know, these companies are
18:00incredible revenue generators. So
18:03it's it's a real it's a really
18:04interesting twist to figure out Well, is
18:07it really a bubble? It you know, if you
18:09go from zero to 16 billion a year in
18:11revenue in
18:13four years or five years, whatever it's
18:15been, um
18:17that that company should be worth a lot
18:20of money. Now, I don't know if it should
18:21be worth two trillion, but um but it is
18:24certainly an incredibly valuable asset.
18:27So, investors I think are are trying to
18:30figure out all of these, you know,
18:32different dynamics and uh
18:34it it's my my guess is that venture is
18:36going to be a really strong asset class
18:38for at least a few more years.
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19:45>> When you think about other major themes
19:47that people are investing in, you know,
19:48AI is obviously probably one of the
19:50biggest. Uh a lot of people who watch
19:51this show or listen to it, uh they're
19:53Bitcoin investors, and there's been a
19:55lot of talk of like the institutions are
19:56coming. Um what's interesting about the
19:58institutional world is you really work
20:00with everyone from family offices all
20:02the way up to sovereign wealth funds,
20:03and there's been a number of sovereign
20:04wealth funds that have started to buy
20:06Bitcoin via the ETFs. But in recent
20:09months, maybe the last year or so,
20:10Bitcoin has not been, you know, the hot
20:12uh kind of commodity. It hasn't been the
20:14asset that everyone is talking about. AI
20:15has sucked a lot of the air out of the
20:17room. What are you hearing from these
20:18institutional investors when it comes to
20:19Bitcoin?
20:21>> So, um
20:23I will say, like digital currencies have
20:26been a wild ride in my world for like
20:30five years now. Um, we saw the, you
20:32know, the huge spike that happened and
20:34then the nuclear winter of uh
20:37of crypto.
20:39I would say institutions have been
20:41curious about this for a long long time.
20:44I think generally speaking where, you
20:46know, five or six years ago
20:49there was a huge percentage of them who
20:51just thought Bitcoin is snake oil. Like
20:54this is not real. This is never really
20:56going to be an investable asset class.
20:58That has completely changed.
21:00I would I don't really know anyone who
21:02says anything like that anymore. I think
21:04people now see that it is a completely
21:06legitimate asset class, but
21:09I I think a huge disappointment frankly
21:12of the Trump administration has been the
21:14inability to get regulations passed to
21:18make it institutional grade. You know,
21:21if you're if you're a portfolio manager
21:23for a sovereign wealth fund or for, you
21:25know, a multi-billion dollar endowment
21:28or foundation
21:29you need guardrails. You know, you you
21:32don't want to put certainly a large
21:34amount of capital at risk into an asset
21:37class that you don't know has the proper
21:41guardrails. Like our our public markets
21:44are incredibly well functioning. They're
21:46the best public markets in the world
21:48largely because I mean, obviously
21:51capitalism at the core of our system is
21:53is the main driver, but you they
21:56wouldn't be as successful as they are if
21:57it wasn't for the regulatory
21:59infrastructure that also protects
22:01investors and that sets up, you know,
22:03it's like you can't have a football game
22:06with no referees on the field. You know,
22:08you need rules and you need a system for
22:11all the players to play within. It needs
22:13to be fair and we thought the Trump
22:15administration was going to make more
22:17progress, I think, in this regard to uh
22:20to create that for the crypto industry.
22:22It hasn't happened. I think if it did
22:25happen, you would see a massive influx
22:28of institutional money come into this
22:31asset class that, frankly, I will they
22:34dabble in it and throw small small
22:37checks, you know, small percentages of
22:39their overall portfolio into it, sure,
22:41to like get more familiar with it. But
22:44um and it it is popular at our cap intro
22:48events. You know, we'll have 50 to 100
22:50funds that are in crypto or at least
22:53have a significant amount of their
22:56investment strategy in crypto. And they
22:58get a lot of meetings with investors,
23:00but I don't hear the next step, which is
23:03stories of how those investors are
23:05writing billion dollar checks to go into
23:08those funds. There are some funds who
23:10have reached scale like that, um but I
23:12think most of their capital is coming
23:14from family offices and individuals more
23:17so than pension funds and foundations,
23:21endowments, sovereign wealth funds, you
23:23know, groups like that. You know, we we
23:25just need that regulatory infrastructure
23:27and if we could do it, I think the asset
23:29class would absolutely explode.
23:32>> Now, when you think about unlocking that
23:34capital, is it just a matter of like
23:36regulation and and kind of government
23:38related things or are there other
23:39aspects that are important for uh for
23:41that capital to flow?
23:43>> I I I think that is the number one issue
23:45right now. I think, you know, 5 years
23:48ago they had there was just a lack of
23:51information and education and
23:53understanding of the space. I think that
23:56has largely changed. I mean, I'll tell
23:58you in I think it was in our 20 22
24:02event, we had it was only 16 or 17
24:07digital asset funds in our event.
24:10They got 800 meetings among them.
24:13I that's when it really kind of hit my
24:15radar and I said, wow, there is a
24:17tremendous amount of interest in this
24:19particular space and what we we went to
24:22the investors who were in these meetings
24:23and said, what was your interest there?
24:25And across the board, they were using
24:27these meetings to themselves up to
24:29speed. You know, everyone was curious
24:31about it. Everyone wanted to get
24:32educated on it. They still get
24:35I'd say like their fair share of
24:37meetings and our events, but
24:40but I think the number one thing
24:41investors are waiting for
24:43are these guard rails to give them
24:45comfort that they can invest safely. And
24:47then of course, you know, like the
24:50recent Binance news is not doing the
24:52industry any favors. You know, it's it's
24:56you you've got to you've got to set up a
24:57system where things like that just can't
24:59happen.
25:01>> Yeah, what I find interesting is on the
25:02retail side,
25:04the inflows to Binance have been higher
25:07than the outflows post event, which
25:09normally you wouldn't expect. But I do
25:11think that there is
25:13re instilled confidence
25:15because Binance backstopped the losses.
25:17So in a weird way, it's like by
25:19backstopping the losses, it's almost
25:20like Binance has like a self-insured,
25:23you know, kind of fund that is going to
25:24go and and now wait a minute. If
25:27somebody else got hacked, they might not
25:28have backstopped the losses, but Binance
25:30is going to do it. You know, there's
25:31precedent for that. And so maybe I'm
25:32safer trading on Binance because they're
25:34going to backstop losses. It's a very
25:36weird psychological thing for the retail
25:38investor community. I don't think the
25:40institutions think that way though,
25:41right?
25:42>> No, I think if you're an institution and
25:44you see that headline, that's
25:46terrifying. I mean, I have like I can't
25:48think of an equivalent event
25:51in our mainstream markets, right? Like
25:54has a bank or a brokerage firm Silicon
25:56Valley Bank like going under or
25:58something?
26:00>> Going under, yes.
26:01>> Yeah, so like
26:03I I think you always have the risk that
26:05a business can be mismanaged
26:07and and go out of business, right? Like
26:10bankruptcy is is a possibility. Whenever
26:13you're making an investment, you're
26:15you're underwriting that risk to some
26:16degree. But
26:18I don't I can't think of a scenario
26:20where like a major investment firm or
26:23bank was hacked and money was literally
26:26stolen out of their accounts.
26:29Like I I can't think of any scenario
26:31where that's happened. So I think if
26:32you're an institutional investor,
26:34you've got to report to an investment
26:36committee, you know, a CIO, then the
26:38overall board has to approve it.
26:42It's I just think it's incredibly hard
26:44to do if you can't say, well, my assets
26:48are going to be custodied at Goldman
26:49Sachs or Morgan Stanley or JP Morgan.
26:52You know, when when those guys
26:55are in the space in a big way, then I
26:58think you're going to see the
26:59institutional investors have a much
27:01higher degree of comfort. But you're not
27:03going to get those guys in the space in
27:04a big way until this other problem is
27:06solved.
27:07>> Yeah, I think that uh I think that makes
27:08sense. Let's talk about private credit.
27:10Private credit obviously had some uh
27:12negative headlines. People were worried
27:13there for a little bit, but seems to
27:14have kind of cooled off in in some of
27:16that concern. What are you seeing there?
27:18>> Totally overblown. And And I kind of
27:20said it as it was happening. There there
27:23So
27:24what I like about private credit is that
27:27there's not a tremendous amount of
27:29leverage
27:30in the private credit funds. You know,
27:32they may have two or three to one
27:34leverage. But where you see real like
27:38systemic level blowups is when an asset
27:41class starts levering 30 to one, 40 to
27:44one, 50 to one, right? Like in the in
27:46the financial crisis in '08, you had um
27:49a lot of these banks were levered at
27:52those kind of numbers. That's when you
27:54can take down the system. Um private
27:56credit funds are making loans to
27:59operating businesses. They're filling in
28:01a void
28:03that exists where where banks are not
28:06servicing various segments of the of the
28:10middle market in particular very
28:11effectively. And private credit has
28:13stepped in to fill in that void and
28:15they've done a great job of it.
28:17As investments, I think they're pretty
28:20great. You know, you put money into
28:21these funds. They make loans to
28:24operating businesses and those operating
28:26businesses make payments on those loans
28:28which result in cash flow back to you as
28:31an investor in the fund.
28:33Um,
28:34there were a few funds who
28:37probably got a little bit too aggressive
28:39in their lending practices, and they,
28:42you know, had too many uh,
28:44too many failures in the portfolio, and
28:47that started to impact their ability to
28:49uh,
28:50to hit the investment returns that were
28:52targeted.
28:53I most of the stories that I've heard is
28:55that a lot of those funds were able to
28:57sell their portfolios
28:59ranging from 60 cents on the dollar to
29:0290 cents on the dollar. You know, that
29:05is far from
29:07a a major crash, and it wasn't even
29:09really industry wide. It it was it was a
29:12handful of the biggest players who
29:14experienced it, but I I can tell you
29:16that my institutional investors are
29:19still completely focused on the asset
29:21class. Like the whole blow out thing was
29:24playing out in Q1 of this year at my
29:27event in Miami in late February.
29:30Private credit funds had 3,000 meetings.
29:33Out of a total we ran about 20,000
29:35meetings in the event this year. So
29:38for one asset class to have 3,000
29:40meetings, I I mean I think it was the it
29:43was in the top three, I would say
29:45uh, asset classes in terms of meeting
29:47performance at the event. So I haven't
29:50seen any real slowdown. I think it has
29:54become a huge
29:56part of investor portfolios. It became a
29:59huge part by the way because um, you
30:02know, your traditional bond portfolio
30:05couldn't generate the returns that it
30:07used to, and that also made private
30:11credit a really interesting alternative
30:14to a bond portfolio when, you know, when
30:16we were still in a ZIRP world. Um,
30:19and I think investors got used to the
30:21returns, they got comfortable with the
30:23fund managers, they got comfortable with
30:24the strategy. So we still see uh, a ton
30:27of interest in private credit. Our big
30:29event in Miami this upcoming February,
30:33you know, we probably have 700 funds
30:35signed up for that, and the you know we
30:38we have the same percentage of private
30:40credit funds signed up for that event
30:42this year as we did last year. So I
30:44haven't seen any I I will say this it
30:47was definitely
30:49um getting maybe a little bit
30:51overheated, right? There were a lot of
30:53new funds coming out. Some of that has
30:56slowed but it it is still a completely
31:00viable asset class with a a ton of
31:02interest.
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32:36>> When you think about um the waning
32:39of interest or or the acceleration of
32:42interest, it does feel like the
32:43institutions are a little bit slower to
32:45cool off on things and they're a little
32:47bit
32:48less, you know, quick to get excited
32:50about that thing. Is that true?
32:51>> Yeah. Yeah, 100% yeah. You know, these
32:53are
32:54these are organizations that have
32:58you know, like for you and I as
32:59individuals, we're thinking in terms of
33:02maybe decades, right? Like I know I'm
33:05going to be in an earning period in my
33:08life, you know, from my early 20s to I
33:11don't know, God willing, maybe my late
33:1370s. But somewhere in there, I need to
33:16start shifting my investment strategy to
33:19be more risk averse, to be focused more
33:22on providing cash flow in my retirement
33:24years.
33:25These big organizations have
33:28a a time horizon of infinity. You know,
33:31if you're an endowment or a foundation
33:33or sovereign wealth fund, you're really
33:35thinking in terms of
33:37uh I need to provide a certain amount of
33:39cash flow and as long as I can, you
33:42know, build my fixed income side of my
33:44book to provide that cash flow,
33:47all the other stuff I'm looking at, I
33:49can take
33:50a a very very long-term view.
33:53Um and I think I think
33:56that leads you to be
33:59uh
34:00you you you just don't experience the
34:02same volatility in your decision making.
34:05You know, when when you have a long-term
34:07view, you can ride out bad markets, you
34:10know, you can hang on to things a lot
34:11longer and wait till they come back if
34:13you believe the core investment thesis
34:15hasn't changed and we're just in, you
34:18know, a moment of, you know, market
34:19panic for whatever reason. So for sure,
34:22they they are they're very
34:25they're much more slow-moving than
34:27family offices and than individual
34:29investors for sure. You know, individual
34:31investors are the ones who probably are
34:34the worst at panicking and you know,
34:36they buy at the top and they sell at the
34:38bottom. Um you know, they're they're
34:42definitely much more subject to like the
34:44emotional swings of the business.
34:46>> But they have more fun, Ron. They have
34:48more fun. Speaking of individual
34:50investors, uh, you've got this
34:52conference going on in Austin, Texas
34:54called Tomorrow X. And when I first saw
34:56you guys, uh, talking about this, I was
34:57like, oh, that's a good idea.
34:59I looked at the lineup. This thing is A
35:01plus plus. I mean, you guys crushed it
35:04in terms of who is speaking. Just give
35:06us an overview, who the speakers are,
35:07why are you doing it, and, uh, you know,
35:09for the individuals who who want to
35:11manage their own money and go learn from
35:13some of these folks, why they should go.
35:16>> Yeah, so I I have to say you are right.
35:18Uh, the lineup is incredibly good. I
35:20think it is literally the best AI
35:22conference in the country as it as the
35:25lineup stands right now. And I have to
35:27give my partners, Gavin Baker and
35:29Antonio Gracias, all the credit. These
35:32are two of the best tech investors in
35:34the world. And they have built
35:36incredible networks and an incredible
35:38amount of goodwill. Like they are just
35:41great humans, uh, that lots of people
35:44have done business with. And like it was
35:46really fascinating to be on the email
35:48chains as they're inviting people to the
35:51event. Basically, everyone loves these
35:53guys and everyone said yes. The the hit
35:56rate was, uh, you know, was like 90% on
35:59this one. Um, we have just an epic
36:03lineup of speakers. Jensen Huang, um,
36:07David Solomon, John Gray, Mark Rowan.
36:11Uh, I mean, the number we we actually
36:13have had to shrink a lot of the sessions
36:15down to 20 minute, uh, time frames just
36:19to give more of these amazing CEOs a
36:22chance to come and speak.
36:24Um, but yeah, if you go to tomorrow x
36:26summit.com, you can check out the
36:28speaker lineup. It's November 17th and
36:3018th in Austin at the Moody Center. Um,
36:33we'll probably have somewhere between
36:36five and 6,000 people by the time it's
36:38done. Um, but it it is an incredible
36:41lineup. And I'll I'll also say the thing
36:44that I love about this event and the
36:46reason we actually put it in an arena
36:48like the size of the Moody Center was we
36:50wanted to democratize access
36:53to these
36:55banking conferences that are incredibly
36:57valuable if you're an investor, but are
37:00largely unavailable to retail investors,
37:03right? If you're even if you're like a
37:05small fund, a retail investor, you're
37:07generally speaking, you're not going to
37:09get invited to a JP Morgan, Goldman
37:11Sachs, Morgan Stanley banking
37:13conference.
37:14You know, those those spots are reserved
37:16for generally speaking, the biggest
37:18funds in the space. Well, we thought,
37:21you know, X has been an incredible
37:23platform for smaller investors to do
37:27their analysis and express their opinion
37:30and engage in dialogue about, you know,
37:33whatever whatever stock it is they're
37:35focused on. And it's incredibly useful,
37:38right? It's like that that kind of
37:41that access wasn't available
37:44before the dawn of platforms like X and
37:46Substack. Well, now what we're seeing is
37:49analysts who post primarily to platforms
37:52like this
37:53are getting just as much attention from
37:56public company CEOs as
37:59the bank analysts have gotten
38:01historically. And And in some cases,
38:03maybe even more so. So we thought, why
38:05don't we do an event that gives retail
38:08investors and these contributors on X in
38:12particular
38:13a banking experience that
38:16you could really only get at one of the
38:17major banks. So Gavin and Antonio
38:20reached out to the best CEOs in the
38:22world. They agreed to speak. And now
38:25what we'll have is actually a main
38:27stage. So if you're a retail investor,
38:29you'll get to be in the room and hear
38:31firsthand some of the best CEOs in the
38:34AI ecosystem
38:36answer hard questions delivered by
38:38by-side analysts about the future of the
38:41space, the future of their business, and
38:43also a a theme the theme of the event
38:47and something that we will talk to every
38:48CEO on that stage about,
38:51is how AI can and should revitalize the
38:55American dream. This is an incredible
38:58technology which can create
39:01capabilities. I mean, it's it's in
39:03essence democratizing intelligence. You
39:05know, it gives every every person who
39:08has access to it the ability to get
39:12answers to questions that you you know,
39:14you'd have to be a PhD in physics or
39:17finance or whatever area, you know, to
39:19to be able to answer these things. Now
39:22that kind of intelligence is available
39:24to anyone. It can go in so many amazing
39:26directions for the world.
39:28We wanted the event to focus on
39:32what do all of these brilliant CEOs who
39:34are creating these amazing businesses,
39:36how do they see whatever it is they do
39:39being applied for the American people
39:43and for the American workers to help
39:45make their lives better and to make the
39:47country a better place. You know,
39:49obviously there's been
39:51it's very sad to me how there's been
39:53just such a negative
39:55tone to so much of what's written about
39:58AI as it's doing such incredible things
40:02for the world already. Um we thought,
40:05okay, there's plenty of that. Why don't
40:08we create
40:10a conference
40:11to tell the other side of the story?
40:13Because the other side of the story, I
40:15believe, is the side that's going to
40:16win. And
40:18and we're going to give all these CEOs a
40:20chance to talk about what they can do to
40:23really create a positive impact for the
40:25world and the country.
40:27>> I mean, it makes sense to me and
40:29the lineup is very high quality, but my
40:31guess is that the insights, the
40:33information that is shared during the
40:35conversations is going to be an even
40:38bigger deal. And then, you know, the
40:39other part of these conferences that
40:41I've always found valuable, which no one
40:42ever really kind of hangs their hat on,
40:44but it's like the people who go to them
40:46are high quality. It's not just the
40:47people on the stage, but then like the
40:48other attendees. And you end up, you
40:50know, meeting folks that maybe only have
40:52a Twitter relationship with uh for a
40:54long time or uh or you end up, you know,
40:56finding folks who are experts in certain
40:58fields or interested from an investment
41:00standpoint. And so uh generally these
41:02events are uh you know, very very
41:04valuable and it's pretty cool to see you
41:05guys putting this together.
41:07>> [snorts]
41:07>> Yeah. No, we're we're so excited about
41:09it. I think um I think the market
41:13really well, obviously the market's
41:15embracing it because we we did this
41:17event
41:18uh
41:19I mean really last minute. You know, we
41:21we secured the facility in Q2 and then
41:25we didn't even announce it until close
41:27to 4th of July weekend. You know, in
41:30when you're doing events of this scale,
41:32generally speaking you start 18 months
41:34before the event date and then you give
41:36yourself at least a full year to really
41:38market it and spread the word. Um so I
41:41very much appreciate you uh bringing me
41:43on your show to talk about this because
41:44that's exactly what we're trying to do
41:46right now is just give people a chance
41:48to see the lineup and uh it's definitely
41:51working. Like our signups on a
41:53day-to-day basis now are off the charts.
41:56It's like people are coming in in droves
41:58as we get closer to the dates. So uh
42:00yeah, I think if
42:01>> Like like is there not enough like uh at
42:03some point is there like a cap that you
42:04can't take more people?
42:06>> You know, it's it's in the Moody Center,
42:08which is where the UT basketball team
42:10plays, so it's a pretty big place. We
42:13would have to probably like reconfigure
42:14the stages, but we would, you know, to
42:16accommodate uh a bigger crowd. But I'd
42:19say a sell out is probably around
42:2110,000.
42:22For a first time, I've never seen a
42:24first time event in finance get anywhere
42:26near that number. Honestly, where we are
42:28right now, I mean we're like in the
42:304,000s and
42:32I can't you know, our event in Miami got
42:35to that after, you know, a decade. Um so
42:38it's pretty uncommon for an investment
42:40event to hit numbers like this,
42:42especially in year one. My guess is um
42:45as people start to see what this is and
42:48who's attending. And by the way, the
42:50attendees are it is a rockstar lineup of
42:54the best venture funds, private equity
42:56funds, some private credit funds. You
42:59know, anyone who's touching the AI
43:01ecosystem um and is prominent in the
43:04investing world pretty much is
43:06represented in this event. And then we
43:07have, you know, the big mutual fund
43:09companies like T. Rowe Price and
43:11Fidelity. They're sending teams like
43:13multiple teams from each of those firms
43:15are coming. So it's uh we're really
43:18excited about it. I think it's going to
43:19be an amazing event. And if you're if
43:21you're a retail investor who's
43:22interested in this space, you know, the
43:24entry-level price is $500. Like
43:28you're not going to get into a finance
43:30event of this caliber for anywhere near
43:32that price point. Um so I'd encourage
43:34everyone to check it out. And actually,
43:36I think we're giving you guys a discount
43:38code, Anthony, which uh
43:39>> Are you? Do do you know what it is?
43:40>> Yeah, it's actually um any of your
43:43listeners uh can go to
43:45tomorrowxsummit.com
43:46and enter the discount code Sylvia,
43:49s y l v i a, and uh that comes with a
43:5320% discount.
43:55>> Amazing.
43:55>> you actually can get in for $400.
43:57[laughter]
43:58Total steal.
43:59>> All right, we'll put the uh we'll put
44:00the link and the all the details down in
44:02in the description for uh for people if
44:04they want to uh check it out. But uh
44:06Ron, man, thank you so much. I I I'm
44:07very impressed with the business that
44:08you've built. You obviously have very
44:09unique insights into uh you know, the
44:11institutional side, but also the uh the
44:13fund managers and and what they're
44:14doing. And now I should push more and
44:15more into the self-directed or
44:17independent investors. I think people
44:19are uh it's pretty obvious that um
44:21that's going to be a big part of the
44:22market as well. So uh thanks for all
44:24your hard work and your team's doing a
44:25great job and we'll do this again in the
44:26future.
44:28>> Awesome, Anthony. Thanks so much for
44:29having me. It was great to be here,

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