Invest Like The Best
Episode 380 AI Commoditization and Capital Dynamics
Invest Like The Best

Episode 380: AI Commoditization and Capital Dynamics

Invest Like The Best

Episode 380

AI Commoditization and Capital Dynamics

Modest Proposal is one of the most thoughtful investors in financial markets. We cover the historical context behind today's market dynamics, the state of active management versus index investing, and why there's no shortage of exciting opportunities despite high valuations.

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(00:00:00) Welcome to Invest Like the Best

(00:04:00) Comparison to Mid-2000s Commodity Markets

(00:07:18) The Role of AI and Power Consumption

(00:09:29) NVIDIA and the Future of AI Investment

(00:13:10) Commercialization of AI and Market Dynamics

(00:23:14) Public vs. Private Market Performance

(00:28:03) Post-COVID Capital Cycles

(00:30:32) Capital Expenditures and Post-COVID Market Distortions

(00:31:47) Amazon's Capacity Expansion and Market Inflections

(00:33:45) Challenges in Displacing Market Leaders

(00:37:50) Behavioral Barriers in GLP-1 Adherence

(00:39:58) Public vs. Private Market Allocations

(00:45:08) International Equities and Japanese Market Potential

(00:47:35) Market Structure and Trading Dynamics

(00:53:22) AI Models and Future Market Implications

 

AI Commoditization and Capital Dynamics

Introduction

Patrick
My guest today is Modest Proposal, joining me for our third conversation and the first in a few years. Modest is anonymous online, but one of the most thoughtful investors that I know overseeing a large pool of capital in public and private markets. He offers insight into many different corners of today's landscape, covering AI's frontier models versus open source models, overcapacity issues in transportation in our post-COVID world and the potential economic impact of GLP-1 drugs and more. I always love hearing what Modest thinks about markets. Please enjoy our latest conversation.

Lessons From Past Commodity Cycles

Patrick
Maybe a fun place to start would be to teach us about what mid-2000s commodity markets can teach us about today's market.

Modest
Yes. So something that's been on my mind throughout COVID and really accentuated by what's transpiring today with AI is this idea of what happens when surging demand meets inelastic supply? And the mid-2000s commodities just did a wonderful example of that, which is China had historically been out of the global economy for a long time, joined WTO, joined the global trading environment.

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