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[00:00:00] Doug McIntyre: So Lee, we, we have big tech companies making huge moves into AI. You just had, in the president’s office, you had SoftBank in there with the Open AI people. Yeah. $500 billion is what they promised. The Wall Street Journal said they’re way behind on that, but you know, they’ll, the money will all get spent.
[00:00:18] Doug McIntyre: You see Microsoft about 50 billion. Meta. About 50 billion. So what’s up with, what’s Amazon’s chest move in this?
[00:00:27] Lee Jackson: what they’re doing is they’re pouring more money into Anthropic and their AI, Claude Opus 4 AI chatbot, and this is something that’s pretty big because my son is in that arena, in the AI web, cloud computing, all that arena.
[00:00:49] Lee Jackson: He says that by far and away the developers, and everybody loves the Claude, they’re big fans of the Claude Opus four. And, the interesting thing is the applications, and you’ve talked about this before, Amazon has the ability to put that application, of course into AWS for their Amazon web services clients.
[00:01:14] Lee Jackson: ’cause they’ll want that. They have the ability to put it on with their retail side, which is gigantic. Absolutely gigantic. Apparently, the Opus four is the, the one that developers use. Apparently it’s something that is, that is the top of the line. better than grok, better than chat AI.
[00:01:33] Lee Jackson: So it’ll be interesting to see how they, if they continue to pour money in there, if they just go and buy ’em all at one point.
[00:01:42] Doug McIntyre: I think part of that is buying ’em all, but the valuations, I think the. Most recent valuation for OpenAI was like $180 billion. if they do another round, it’s gonna be more than that
[00:01:56] Doug McIntyre: You’re looking at Musk’s X AI valuation, like 80 billion. I don’t know that even Amazon is gonna wanna write a check for what could be a no million dollar plus to buy a company that these, many of these are not revenue companies yet. Or if they are revenue small. The numbers I saw on OpenAI said that they’re two to three years away from making money, and as projections are often rosy.
[00:02:24] Doug McIntyre: Yeah. They do this kind of stuff, but Amazon can look at the Google model. Google is putting this on almost all their search pages. It’s sort of a Gemini AI summary.
[00:02:35] Lee Jackson: Right, right.
[00:02:35] Doug McIntyre: That gives them a lot of distribution for their AI consumer products.
[00:02:40] Lee Jackson: Oh, it’s beautiful because it’s right there.
[00:02:42] Doug McIntyre: Amazon.com has a similar massive, distribution among consumers.
[00:02:48] Doug McIntyre: It’s gigantic. So they’ve got a way to do what Google’s doing. And as you pointed out, web services, Amazon web services, the cloud computing business of the future is the AI cloud computing business, right? Absolutely. It is. It’s one of the reasons that Microsoft is so, is so desperately. putting money into, because Azure, their, their cloud business, they want to stay in number two, close behind AWS or maybe even pass ’em to do that, they’ve gotta have world class AI capacities Yeah.
[00:03:25] Doug McIntyre: For clients who want to use, one of those enterprise cloud computing companies.
[00:03:31] Lee Jackson: Yep. Yeah, and it’s interesting because in, as this continues to evolve, we’re gonna see it. More and more and more. And you’re right, I think they’re, they’re unlikely to go the, the big money to buy it all, but they certainly wouldn’t mind having a good chunk of it, like Microsoft has of OpenAI.
[00:03:52] Lee Jackson: So, I mean, Microsoft’s been putting money in there for, what, three years? Four years, five years.
[00:03:58] Doug McIntyre: There’s another point we should make to investors. There’s a good chance that these AI companies are not gonna go public anytime soon. You’re now seeing this trend of private companies staying private, and they’ll let the employees and some other people cash out, occasionally shares up for sale so that you know the people who work there and some of the institutions don’t feel illiquid.
[00:04:21] Doug McIntyre: But I don’t think you’re gonna see any IPO soon in the, the mega AI companies, most of ’em don’t want the scrutiny, they don’t want to be involved with the SEC, they don’t want to have to have public boards. So what’s your proxy? Your proxy is to buy Microsoft, Amazon. Yeah. Your only proxies are the companies, big tech.
[00:04:44] Doug McIntyre: Nvidia is the primary proxy for that.
[00:04:47] Lee Jackson: Yeah. I think you’re absolutely right. And again, if they did try to go to market, the capital markets to go public, they’ll never get their valuations. Never. and this has happened over and over recently where, the valuation was, 10 billion and they could only price the, the IPO at a $5 billion level.
[00:05:05] Lee Jackson: So, I think you’re exactly right. They’ll probably stay where they are at, at least until, at least in, unless they can move it to be a huge money making enterprise, which. Remains to be seen.
[00:05:18] Doug McIntyre: So if I were an investor and I were interested in what’s my AI proxy investment, Nvidia is clearly first on the list.
[00:05:25] Doug McIntyre: It’s almost, it’s almost a pure play. It’s as close as you’re gonna get to a pure play. Then the other people are making huge investments in this that I would look as, I’d look at Microsoft, I’d look at meta, probably Amazon. Likely alphabet. I mean, I look at those, I look at those four, four names and saying, I’m buying a piece of the AI revolution.
[00:05:52] Lee Jackson: Yeah. And there’s probably countless ETFs and mutual funds that offer all of them, so if you don’t wanna just, and they’re all very expensive, so if you, I mean on a dollar per, per share level. So if that’s too much, find the mutual fund or the ETF that suits you best and go that route.
[00:06:11] Doug McIntyre: Yep. The, the big tech war now is AI. It was operating systems. Then it became, cloud was the, was the big deal. the earnings come out. Cloud computing was the thing that Wall Street looked at. Yep. Cloud computing is in the rear view mirror now when it comes to what institutional investors are looking at when they value these companies, it’s not at the top of the list anymore.
[00:06:37] Lee Jackson: Nope.
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