Kathy Wood’s Investment Playbook: AI, Robotics, Crypto and the Future of Wealth

Q: Why AI Is the Biggest Disruption

- AI will touch every sector, from autonomous taxis to healthcare diagnostics. - Tesla is described as *the largest AI project on Earth*, with a projected **$8‑10 trillion** autonomous‑taxi market in the next decade. - Humanoid robots could generate a **$26 trillion** revenue market, eventually dwarfing robo‑taxis. - AI‑driven “vibe coding” (natural‑language programming) will democratize software creation, enabling individuals to customize tools without buying off‑the‑shelf solutions.

Q: How to Invest with $1,000 or Less

1. **Buy an ARK ETF** (e.g., ARK Innovation ETF – ARKK) to get exposure to the 35‑stock portfolio in a single trade. 2. **Dollar‑cost average** – invest a fixed amount each payday to smooth out volatility. 3. **Consider a crypto‑focused ETF** for Bitcoin exposure if you prefer a regulated vehicle. 4. **Diversify across sectors** – allocate a portion to AI chips, a portion to autonomous‑mobility, and a small slice to crypto.

The Diary Of A CEO

Feb 04, 2026

•

4 min read

YouTube video ID: ZznpMh0DegE

Source: YouTube video by The Diary Of A CEO — Watch original video

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Who Is Kathy Wood?

Kathy Wood is the founder of ARK Invest, a firm that manages nearly $30 billion and is famous for spotting disruptive trends before the mainstream. Her background spans Capital Group, AllianceBernstein and a lifelong fascination with technology and economics.

Core Investment Philosophy

Focus on five innovation platforms: robotics, energy storage, artificial intelligence, blockchain, and multi‑omic sequencing.
Right‑side‑of‑change mindset – invest in technologies that will reshape the economy rather than trying to predict short‑term market moves.
Long‑term, high‑conviction bets – hold positions for 5‑10 years, expecting 10‑fold returns as the technologies mature.
Original research – ARK publishes its research openly, believing that transparency attracts capital and educates investors.

Why AI Is the Biggest Disruption

AI will touch every sector, from autonomous taxis to healthcare diagnostics.
Tesla is described as the largest AI project on Earth, with a projected $8‑10 trillion autonomous‑taxi market in the next decade.
Humanoid robots could generate a $26 trillion revenue market, eventually dwarfing robo‑taxis.
AI‑driven “vibe coding” (natural‑language programming) will democratize software creation, enabling individuals to customize tools without buying off‑the‑shelf solutions.

Top Public Stocks According to ARK (not ranked)

Tesla (TSLA) – flagship AI and autonomous‑vehicle play.
NVIDIA (NVDA) – leading AI‑chip maker, still a core holding despite valuation swings.
Coinbase (COIN) – the most regulated crypto exchange in the U.S., gateway to digital‑asset adoption.
Crispr Therapeutics (CRSP) – gene‑editing leader targeting sickle‑cell disease and beta‑thalassemia.
Palantir (PLTR) – AI‑driven data platform for governments and enterprises.
Archer Aviation (ACHR) – electric‑vertical‑take‑off‑and‑landing (EV‑TOL) vehicles.
Shopify (SHOP) – e‑commerce platform leveraging AI for personalized shopping.
Roblox (RBLX) – user‑generated gaming world that also serves as a sandbox for AI‑enhanced creativity.
TSMC (TSM) – world‑class semiconductor foundry essential for all AI hardware.
Bitcoin (via GBTC or direct exposure) – treated as a new asset class and “digital gold.”

How to Invest with $1,000 or Less

Buy an ARK ETF (e.g., ARK Innovation ETF – ARKK) to get exposure to the 35‑stock portfolio in a single trade.
Dollar‑cost average – invest a fixed amount each payday to smooth out volatility.
Consider a crypto‑focused ETF for Bitcoin exposure if you prefer a regulated vehicle.
Diversify across sectors – allocate a portion to AI chips, a portion to autonomous‑mobility, and a small slice to crypto.

Bitcoin & Digital Assets

Purchased by ARK in 2015 at ≈ $250 per coin; now over $100 k.
Seen as a store of value, a global monetary system, and a new asset class.
Institutional adoption is accelerating after the 2023 spot‑Bitcoin‑ETF approval.
Stablecoins (e.g., USDC) act as digital cash; Coinbase earns revenue through its partnership with Circle.

The Future of Work & Society

Productivity boost from AI‑powered robots will offset demographic shrinkage in many developed countries.
New job categories will emerge around AI‑agent design, robotics maintenance, and digital‑asset compliance.
Creativity, ingenuity and the willingness to experiment will be the key differentiators for humans.

Risks & Concerns

Regulatory uncertainty – especially around autonomous driving and crypto.
Technology adoption lag – some sectors (e.g., autonomous taxis) may take 5‑10 years to scale.
Potential displacement – workers in traditional roles must up‑skill to stay relevant.
Geopolitical risk – reliance on Taiwan‑based chip manufacturers (TSMC) adds supply‑chain vulnerability.

Bottom Line

Kathy Wood’s strategy is simple: identify technologies that are deflationary, cross‑sectoral, and act as launchpads for further innovation. By investing early in companies that embody these traits—Tesla, NVIDIA, CRISPR Therapeutics, Coinbase, and others—investors can position themselves on the “right side of change” and potentially capture multi‑digit returns over the next decade.

Key Takeaway: The convergence of AI, robotics, energy storage, blockchain and biotech is set to accelerate global GDP growth to 7.3 % annually. Getting exposure now through ARK’s thematic funds or directly into the highlighted stocks offers a pathway to ride this historic wave of productivity and wealth creation.

Investing in the five disruptive platforms that Kathy Wood champions—AI, robotics, energy storage, blockchain and biotech—offers the best chance to capture the next wave of economic growth and achieve outsized returns.

Frequently Asked Questions

Who is The Diary Of A CEO on YouTube?

The Diary Of A CEO is a YouTube channel that publishes videos on a range of topics. Browse more summaries from this channel below.

Does this page include the full transcript of the video?

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Helpful resources related to this video

If you want to practice or explore the concepts discussed in the video, these commonly used tools may help.

Ark Invest Innovation Investing Book Recommended

Explains Kathy Wood's investment thesis and provides actionable insights for investors looking to profit from AI, robotics and biotech

Amazon →

Tesla Model Y

Demonstrates Tesla's autonomous‑taxi platform in practice and lets owners earn income by participating in the future robo‑taxi network

Amazon →

Nvidia Geforce Rtx 4090 Graphics Card

Provides the hardware power needed for AI development and deep‑learning projects, aligning with the AI‑chip theme in ARK's portfolio

Amazon →

Bitcoin: The Future Of Money Book

Offers a comprehensive overview of Bitcoin as a new asset class and its long‑term investment potential, echoing ARK's crypto outlook

Amazon →

Robotics Kit For Beginners

Hands‑on way to learn robotics fundamentals, supporting the education needed to participate in the AI‑robotics revolution

Amazon →

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Summarize another video

Full Transcript YouTube

I've read through a decade of your
research to figure out what the best
investment is so anyone can get rich in
the future. And you've predicted that
this will grow by at least 5,000%.
Yes. And my conviction is so high
because of what I do on a day-to-day
basis. Is there a woman on planet Earth
that manages more money from an
investing capacity than you? Maybe not.
I'm overseeing nearly $30 billion. Okay,
so I might have $500. What should I be
doing with that? So, this is all you
need to know. Kathy Wood built a
multi-billion dollar fund by spotting
trends before anyone else. And now, with
over 40 years of market insight, she's
showing you how and where to invest,
too. AI is the biggest technological
disruption in history. And this
incredible rate of change is making
people uncomfortable. But if you are on
the right side of change, investment
opportunities and job opportunities are
going to be enormous. But people don't
know what to do. For example, many
people think Apple is a very safe
investment. It's probably going to be
disrupted by artificial intelligence,
but yet Tesla is going to be the
biggest. You've invested just over 2
billion in Tesla. Yeah. Because Tesla is
the largest AI project on Earth. So AI
has to be a top priority, not an
afterthought. So I've got questions.
What's your top 10 public stocks that
anybody could invest in? What's the
philosophy towards investing that will
make one rich over time? And then if I
want to invest in AI, how should I be
investing my money? According to our
research, these investments will go up
more than 10fold in the next 5 to 10
years and create incredible
opportunities for investors. So, number
one,
this has always blown my mind a little
bit. 53% of you that listen to the show
regularly haven't yet subscribed to the
show. So, could I ask you for a favor
before we start? If you like the show
and you like what we do here and you
want to support us, the free simple way
that you can do just that is by hitting
the subscribe button. And my commitment
to you is if you do that, then I'll do
everything in my power, me and my team,
to make sure that this show is better
for you every single week. We'll listen
to your feedback. We'll find the guests
that you want me to speak to and we'll
continue to do what we do. Thank you so
much.
[Music]
Kathy Wood, is there a woman on planet
Earth that manages more money from an
investing capacity than you? Well,
there's probably not someone overseeing,
yes, nearly $30
billion. Uh, but I know there are teams
out there, including women, that manage
maybe a lot more than that. What is it
that you do? invest in companies that
are going to that are technologically
enabled and that that are going to
transform the world as we know it.
Robotics,
energy storage, artificial
intelligence, blockchain technology, and
multiomic sequencing in the life science
space. The last is the most complicated.
And how long have you been an investor?
I started when I was 20 years old at a
company called Capital Group and I was
introduced to the firm by Art Laugher.
Now Art Laugher, he's one of the most
important economists of our time. He
created something called the Laffer
Curve. He's advised most presidents
since President Nixon and he's advising
President Trump as well. And how is
these five big innovation platforms that
you speak of, how is that going to have
an impact on the average person's life?
Like why do they need to know this
stuff? How is it going to change their
decision-m and change their career?
Now that the world is moving so quickly
into this new world uh and Bitcoin has
become uh so successful an investment
many people are trying to figure out
okay how how do I get involved with the
new world and when I say get on the
right side of change we think there's
going to be a lot of disruption to the
traditional world order when I say that
in terms of people understanding What I
mean? I think many people think Apple is
a very safe investment because huge
hoarde of cash, very successful
smartphone, you know, number one market
share of smartphones in terms of
profitability by far. And yet we can
tell you and this was one of what's
called the mag six that led the stock
market over the last few years. The top
six stocks the top six stocks the market
was very narrowly focused on this ilk of
stock. And we were saying you know what
Apple is probably going to be disrupted
by artificial intelligence. And one of
the reasons we started asking questions
very early is what is the ultimate
mobile device? Ultimately, it's going to
be an autonomous
vehicle. Apple should have been all over
that and they were trying and we saw one
management turnover after another. This
is an AI project and what we were
learning as they were turning that team
over uh time and again is they they
weren't getting AI right. They were not
positioning correctly. Your concern for
Apple? I think Apple it has so much
cash. It has such a loyal customer base.
uh it will be fine but maybe it's
revenue growth has slowed to almost
nothing and so maybe it'll be a mature
cash cow that's not what we do we invest
in technologically enabled disruptive
innovation AI is the biggest dis
technological disruption in history and
if they're not going to get it right
we're not going to be there so if I want
to invest in AI if I agree with you
Kathy and I said you know I think I
think you're right that AI is the
biggest technological wave coming into
shore and the biggest opportunity h how
should I be investing my money in in in
your view how are you investing your
money to capitalize on AI many people
used to invest in AI through one stock
that was Nvidia that was the check the
box I own the GPU the chip manufacturer
which is the most important uh chip
manufacturer in the AI age and its
valuation meaning its uh price relative
to earnings um really got up to very
heady levels and we were saying at the
time well if Nvidia's valuation is
correct there there there are going to
be a lot of other winners who are they
uh well our largest position and the
flagship strategy ARK is Tesla and as we
were trying to help people understand
why we were swapping away from Nvidia to
stocks like Tesla and Palunteer which is
a software provider. Um we were trying
to explain that this new world around AI
is going to happen very quickly and uh
Tesla is the largest AI project on
earth. Uh I posted that on X and Elon
liked it. So it must be
true. But it is true if our research is
correct. Uh we believe that um the
entire ecosystem associated with
autonomous uh taxi networks is going to
be worth 8 to10 trillion dollars in
terms of revenue generation in the next
5 to 10 years. And if you want to put
that in context, the the entire GDP of
the world today is about 130 trillion.
So 10 trillion is going to move the
needle. Tesla are launching their first
cyber taxi, I believe, in Austin in June
potentially. Yes, it so the Cyber Cabs
will launch next year, but in Austin in
June, those will be Model Y's. and I'm
looking to buy another Model Y because
it will in effect be a cyber cab. Okay?
And if I chose to, I could have my Model
Y drive me to work and then let it out
for the day and earn money on it, have
it pick me up at the end of the night.
And some people will do that. And Tesla
will provide the platform for that. I
think a lot of people don't realize just
how much of the economy is about
driving. Yes. So taxis, deliveries,
these kinds of things. It's a hu is it
the single I think it's the single
biggest employer in the world. Yes.
Transportation broadly defined. Yes. And
and it's not just on the ground of
course. Uh as we've studied uh
autonomous taxis uh moving forward uh we
believe the cost of transportation will
come down fairly dramatically. So, uh,
in the US today, an Uber costs roughly
$2 to4 per mile. Mhm. Um, at scale. Now,
this may not be for 5 to 10 years, but
this is the direction that Tesla
certainly is headed. Uh, we believe that
Tesla will be able to offer a service
for 25 cents per mile. And because of
that, we think there will be much more
congestion in the roads. When you cut
the price of something, you get more of
it. Yeah. And that led us into the air.
And so we've been stud studying EV
talls. Um what's an EV tool? EV tall is
an electric vehicle takeoff and landing
like a drone type. A drone but for for
people. Yeah. So we own Archer in our
portfolio. And of course AI is a part of
this new world as well. Um, and it's a
part of the defense world as well as we
are trying to save our soldiers and um,
and move out there with autonomous
drones. So, autonomous uh, mobility on
the ground, in the skies, ultimately on
the water. So, so Tesla, so that's one
big we we think that's going to be the
biggest in the short term in terms of
revenue generation. The biggest
application of AI. We think the most
profound application of AI is going to
be in healthcare because of AI and this
is already beginning to happen. uh we
are able to
diagnose cancer with a blood test in
stage
one. Think about that. If you discover
cancer in stage one, you can save most
people, right? And maybe even before
stage one. Why? This is the convergence
of sequencing technologies. So DNA, RNA,
protein sequencing
uh technologies and then the third uh
technology that is breakthrough and
already making a difference is crisper
gene editing. The convergence of those
three technologies is beginning to cure
disease. So, uh, a company called
Crisper Therapeutics, which is one of
the largest in our ARKG fund and in the
top 10 in our ARK fund, uh, has
developed a therapy uh, to cure sickle
cell disease with and betthalmia. Both
of those are blood related diseases with
one treatment. Think about that. Now,
the preconditioning for that is
gruesome. It's it's it involves it's
almost like chemotherapy which is going
to change. Uh but nonetheless there's
huge demand for it because you know
these people go to the emergency room 10
to 20 times per year for blood
transfusions to save their lives. Of
course they're going to go through a
tough regimen. They want to live a more
normal life. Uh so it's already
generating revenue. Both both of those
are already generating revenue for
Crisper Therapeutics and a company
called Vert.Ex. So there's there's well
there's three or four different
companies you've mentioned here. Tesla,
the other one was Archer. Archer is the
EV tall company. Yes. Which is your
flying cars, basically your drone cars.
Yes. And Chrisper and Tesla. So if I
start with Tesla, you were bullish on
Tesla. You were making big predictions
about Tesla before pretty much anyone
else out there. I think in 2015. Mhm.
And at the time in 2015, you said that
you believed the stock would get above
4,000 roughly right on the old stock.
Yeah. On the before the stock split. And
you were right by some significant
margin. Um I think you predicted it
would be 4,000 before the stock stock
splits. And I think at its peak that
equates to about 18,000 maybe 12,000 at
its peak. Yes. Well, in that region, we
we we were right about two early years
or Tesla was got to where we believed it
would go two years before most expected.
You know, in 2018 and 19, many people,
as Elon was des discussing and
describing production hell for the Model
3, um, many people thought the company
would go bankrupt. And uh and yet we
knew that if Elon Musk could create a
reusable rocket that could land on a
barge in the water, he would be able to
figure out how to produce at scale the
Model 3. That was to us a simple um
conclusion. Now as in hindsight as we're
learning from Tesla production hell and
they themselves were worried that's why
Elon slept on the floor in the
production factory and just became
maniacally involved which is how he
works uh as uh so yes and now our
prediction the stock is I'm not going to
be exactly right on this 270 280 uh
dollars uh our prediction in five years
is 2600
And 90% of that valuation comes not from
the electric vehicle but from this robo
taxi platform. Uh because the electric
car if you think about it is you know a
one-shot sale. You know sell and hope
they come back when they're replacing
their car. This essentially means that
we'll be driving cars that we can click
a button and then then it becomes an
autonomous taxi. So I go on holiday, I
have my my Tesla car at my house. When I
go on holiday, the car turns into a taxi
and starts chauffeering people around.
It makes me money. But also from the
consumer's perspective that are trying
to hail a taxi. At any point I can go on
my Tesla app, I press a button, a
autonomous car comes to me with no one
driving it and it takes me to my
destination with no driver at all.
Right. Um and then the recurring revenue
model I believe is you sub you
subscribe. It probably could it it could
be a sub you could subscribe to the
network or they could uh you know maybe
it could be either or subscription or
allocart if you don't think you're going
to use it that much. So now when I'm
here in the UK and Europe many people do
not believe what what you just said and
and they don't because your regulators
have not allowed FSD here. I think they
might I somewhere in Europe I think
they're beginning to consider it. Maybe
even in the UK here they have are
considering it. Um in St. Petersburg,
Florida where we're based, um I can go
from my house to anywhere and flawlessly
the car will take me there. Now, we
still have to sit in the driver's seat
for now, but in June,
uh, or soon thereafter, when they turn
the system on, if regulators permit,
right now we're state byst state. I
think that's going to change so that
we'll have federal regulations so that
this can happen a lot faster. One other
thing about Tesla though in that 2600 uh
dollar number, we do not include much
for humanoid robots. Now I this and and
this is happening faster than we
thought. Um h and the reason it's
happening faster is humanoid
robots they are the convergence of the
same three technologies or innovation
platforms as robo
taxis robots robotics so actuators and
so forth getting them to work energy
storage battery operated and AI
so Tesla is way ahead of the game on
humanoid robots and yet we have very
little. Now, Elon thinks that the
humanoid robot business is going to
dwarf the robo taxi business and we
think he's right. Uh, but longer term.
So, as I mentioned, we expect all in
around the world, including China, not
just Tesla, but the entire ecosystem, an
8 to uh 10 trillion dollar market uh in
the next 5 to 10 years. for humanoid
robots. Uh we expect a $26
trillion revenue market. Now that's
going to be a little further along. Uh
robo taxis will happen faster, but it
may not be as distant as we were once
thinking. For anyone that doesn't know,
humanoid robots are basically robots
that we'll have in our home and at work.
Mhm. So these are there was a video that
I think um Elon retweeted the other day
showing one of the human humanoid robots
dancing. Dancing. Yes. Was that real? I
was like looking at that video thinking
surely that's not real. But he confirmed
I believe that it was real. Yes. Yes.
Now when we went to the Cyber Cab event,
uh there were some humanoid robots
dancing there, but they were tethered
and they were remotely controlled. Yeah.
Uh now Cyber Cab, I think was about a
year ago. Yes. Maybe. So since then
they've been able to untether them and
uh I do believe that those that dancing
robot was was um not tethered and not
remotely controlled. It was quite
shocking to see a robot doing that
because if a robot can have that
dexterity and
mobility and then you overlay that with
the AI technologies that are
accelerating rapidly, it begs the
question and the question is quite clear
which is what about humans? Yes. Um, and
just to put a finer, you know, note on
this, um, Elon will not be satisfied
until these robots can thread a needle.
So, that's where we're going. What does
that mean for humans? So, you know, the
history of
technology is that it has been a net job
creator throughout history, but humanoid
robots are getting awfully close to what
we do, right? So, it's a good question.
I I think creativity is a big part of
that. Ingenuity and creativity. And, you
know, I think there's going to be a
there are going to be a lot of new
inventions uh in the future. So, let's
see what those are. But even today
there's something called vibe coding.
Have you heard of it? Okay. Because
we've moved into the world of natural
language programming. What is vibe
coding for someone that doesn't know?
It's vibe coding means you know a
natural language. I know we all know a
natural language. Ours is English for
the most part but could be any language.
Um, we're going to be able to go to
chatgbt or to especially now they just
launched I think last week something
called codeex replet uh and anthropics
fantastic for for um programming and
we'll say this is what I'm attempting to
do in English language and and I've seen
demos of this just internally we we're
going to replace some of our software
that we're buying from outsiders and
customize it for us because, you know,
we don't have to buy offtheshelf
anymore, one sizefits-all. I think
there's going to be a lot more
customization and personalization and
creativity explosion here. You know,
it's interesting that this is happening
when the demographic profile of the
developed world is as it is. We have a
very low unemployment rate in the US. I
know the unemployment rates in Europe
and the UK have been dropping. to much
lower levels than where where they were
stuck for years. I remember thinking,
"Wow, double digits." Uh we have a
demographic issue. I mean, if you if you
watch what uh Elon Musk worries about
the most, he he worries about the
population implosion
uh because collapse collapse in
population in the developed world um
because we're not uh u we're not
producing children above the fertility
rate. We're we are setting up for a
shrinkage with China is going there,
Japan is going there. And so we're going
to need productivity
uh productivity to help us if we can't
find human
beings. Uh okay. So you're so you're
saying that the robotics and AI could
actually fill the gap that we lose in
terms of productivity because our
society is going to be like an inverted
pyramid. It's going to be more um
elderly people and less young people.
Yes. Yes. So the robots are going to
Yes. Absolutely. It's productivity is
going to be essential. So, as we're
looking at real growth ahead and when
you think about real growth,
uh you should be thinking, okay,
somebody's benefiting from this. Um, and
I'm going to set what I I'm going to set
up the number here, uh, by describing
what has happened historically. If you
look from 1500 to
1900 and you try and figure out what
real GDP growth was back then, real
economic growth, um, as best as uh,
Brett Winton, our chief futurist in
consultation with academics can
determine, it was roughly
0.6% per year. And then we had the
industrial revolution. Uh we had the
internal combustion engine, telephone,
electricity. And for the past 125 years,
real GDP growth has been
3%. And and most li living standards
have gone up over time. Some more than
others. I know that's a debate, but most
have gone up.
If we as we look forward based on the
five innovation platforms around which
we have centered our research and
investing, if we're right, real GDP
growth in the next five years could
accelerate to
7.3%. And that gives you a sense of uh
the economic e uh activity wealth
generation out there. And what when we
are presenting to investors, we are
actually presenting to them not only
because they're investors, but because
they have children or grandchildren who
need to adapt to this new world. And our
mantra in giving away our research,
which we do, is get on the right side of
change. We also do podcasts. Um we we
try we do a lot of outreach because we
think this is a very important moment in
time. Uh seize the moment grab hold of
these new technologies because that
growth rate is more than twice where
we've been. And if you are on the right
side of change, we think the
opportunities are going to be enormous.
Uh investment opportunities and job
opportunities. Yeah. I I feel like I've
I feel like
um I feel like I can't figure out what
how the displacement rate meets the
creation rate. So the destruction rate
of of current jobs will meet the
creation rate of new jobs because many
of these new jobs I I guess there's some
of them we can't predict yet. I
understand that. But even the ones that
we can't predict yet would need to be
inherently human i.e.
need the skills of a human for them to
be occupied by by humans. Um, so what
category of stuff is that? Like my my
girlfriend's a breath work practitioner.
She's upstairs now with 10 women and
she's teaching them breath work. Okay.
So she's fine. Yeah. Like cuz they're
doing that in person. What? Whatever.
She's fine. Well, and maybe she's not if
people decide to do it on. Yeah. On
chachi. But but if they want to be with
a group of women Yeah. and you know
learn from an expert whom they respect.
There's as much the social experience
that's going to become more important.
Relationships are going to become more
important. Many people in our business I
think are going to be out of jobs
because uh the business has become
really nothing I I shouldn't be this
disrespectful and it's not not quite
right but uh at all uh but you know so
many are just hugging benchmarks
uh whether it's S&P 500 or MCI world or
the NASDAQ that a machine can do that a
machine can do that easily and that is
what passive investing is is machines
doing it. I think in order to earn a
place in the new world, you've got to
add a lot of value, more value than a
machine can. So, in our case, we're
saying, okay, well, our stocks are not
in those benchmarks. Uh, and
therefore, you know, they're they're we
are doing original research trying to
figure out who they are and where they
are. these these companies that are
going to transform the world. Why can't
AI replace what you're doing in terms of
so and we think about that all the time.
So
AI
can use pattern recognition. It's all
based on history, right? Uh it can use
pattern recognition maybe to do what
we're doing. What are the three
characteristics that define an
innovation platform for us? The most
important one is they follow something
called rights law which measures the
learning curve. How fast the costs are
going to decline with this new
technology. Technology is deflationary.
Costs fall over time and they're passed
through into lower prices or better
performance one or the other. Um that is
the most important. A machine can figure
that out I'm sure. But asking the
questions are going to be important.
Like there wasn't before 2014 when we
started arc much on autonomous mobility
or EV talls or for that matter AI. AI
had become science fiction. There
weren't any breakthroughs in recent
years but then we got some
breakthroughs. So could so rights law is
the first figure out that cost curve
decline and and see how quickly the
technology can prolificate uh
proliferate across sectors. That's the
other criteria criterion here. The
technologies that we are following are
going to cut across economic sectors and
apply uh to more than one group of
people. And then the third is that these
technologies serve as launching pads for
new technologies. So in the case of DNA
sequencing, which was the base
technology, we needed that before
crisper gene editing uh could be
created. We needed to be able to
understand what was mutating in the
genome, where the programming errors
were so that gene editing could come in
and edit out those programming errors.
And do you think in five 10 years from
now that unemployment is going to be
higher or lower?
In five or 10 years,
um let's let's assume we don't have a
policy mistake and and a recession. So
just just steady state I think it will
be the same or lower and most of this is
because those baby boomers are retiring.
Uh so they come out of the employ they
come out of the labor force and uh and
the generations following them are
smaller. Even now what's happening is uh
we're we're passing through the baby
boom echo meaning the children of the
baby boom that cohort
was I don't think it was any bigger than
the baby boom uh the baby boom
population. Do you think there's because
of the speed of and the acceleration of
AI the like just the the length of
careers has radically reduced because
you would go to like you would go to
school then you go to university you
qualify as I don't know an accountant
and that's like a 10 15 year process you
get a job as an accountant you start
working your way up but now with AI
coming in these some of these jobs are
being completely
annihilated extremely quickly at the
same time vibe coding yeah is booming.
So I think what's going to happen and
this will be very healthy for
productivity. We're going to have a lot
more experimentation and people taking
risks on themselves. Uh and maybe this
idea of a corporation as we know it is
going to change radically. You know
crypto is enabling distributed
autonomous organizations.
uh just like Bitcoin there's there's no
no one governing it right uh that it's a
distributed network and you know let's
see how these do and how vibe co coding
and AI integrate into the crypto I and
I'm going to stop calling it crypto
because it's really should be called
digital assets world which legitimizes
it more crypto sounds nefarious
digital assets is where you know more
than young people and I'll say young
people are spending more than half of
their discretionary their free time
online and so property ownership online
is becoming more important it's it's
being legitimized by the way people are
spending their time on this point of
robotics and AI your your biggest
position I believe is Tesla isn't it in
your fund yes um but obviously Elon
decided Ed that he wanted to go into
politics and he wanted to do oh Elon the
department of government efficiency
called Doge. So teaming up with Trump to
try and eliminate government waste. Now
as an investor Mhm. you
must not love that. Well I I have two um
I have because it did impact two points
of view performance of the company. Do
you know I have I drive a Tesla when I
go to America and it was the first time
ever on the last trip to America in
January. I live in LA now um where I'm
driving my you know my cyber truck. It's
the full self-driving. It's incredible.
But it was the first time ever I thought
I like I could be attacked. So I
probably shouldn't get a cyber truck. I
should probably get something else cuz I
heard of all these reports of people
being attacked. And so it was quite
interesting to hear in the earnings
report which I listened to that there's
been this decline in revenue um in
profitability in vehicle sales growth
etc. in Q1 of this year which I think
even Elon in that in that earnings call
highlights is a consequence of him
becoming political. Yes. Uh I think that
surprised him. Um so I have many
thoughts about this. Our government has
become so bloated. It is scary and uh
our indebtedness is growing. And if we
want to remain the reserve currency of
the world, we're at risk of of losing
it. And and on our tail is the whole
digital asset world, right? So, um,
government spending is taxation. It's
either taxation that's going to happen
immediately or will happen in the future
or will happen through inflation, which
is the most regressive tax at all. So I
think his that the the sentiment was was
right in terms of you know getting in
there and seeing what technology can do
for the government which is really
what's happening. I'm watching it in the
FDA how they're starting to use AI. It's
phenomenal what's happening. Uh so the
question I usually get so I I'm very
happy that ha half of the solution is
understanding the problem that someone
is in there with that focus and
determination. He of course has said
he's stepping away uh this month as a
matter of fact to spend more time with
his companies which you must be happy
about. Well, of course I'm happy about
it, but I I have with the exception of
this political dynamic, I don't think
that Elon uh not being there on a
day-to-day basis is what has caused the
problem in the first quarter. It was
much more macro. We had a negative
quarter in real GDP growth in the first
quarter. So macro which is hitting
everyone and the overlay of this
political dynamic the news cycle thank
goodness moves fast and so we'll we'll
be through that I think and by the way
there are news reports even this weekend
saying those who were feeling about him
you know as it relates to Doge and you
know one party are having a change of
heart because tax rates are going to
come down because we're being more
disciplined on the on the government
spending side. Elon's way
of managing his companies is to attract
the best and the brightest not only
scientists, engineers but also business
people. Uh they these are people who
want to solve the hardest problems in
the world.
um he sets a timeline that seems uh
reasonable to him for milestones to
occur and he doesn't interfere unless
they start missing those milestones or
the timing of those milestones. Then he
gets involved and that's where you hear
he'll go in and he'll just fire people
wholesale and you know and and you know
get the program going again. And he's
he's done that certainly at Tesla. He's
done that at all of his companies. And
so he's really troubleshooter in chief.
Once he understands and has set a
strategy, he then becomes troubleshooter
chief. Have you met him? Oh, yes, we
did. Actually, our uh first podcast with
him was in 2019. Oh, I saw that during
during production hell. Yeah. And uh we
were so happy. So, as you know, we have
a social strategy. So, we push our
research out through social media as we
give it away or as we're evolving it.
And uh he liked a piece of research that
Tasha Keiny had put out on autonomous
back then. And I was on a phone call. I
couldn't get off, but I heard this
whooping and screaming through the
office. And I I I thought it sounded
good. It wasn't an emergency, so I I
didn't have to leave that call. But I
got out. I said, "What happened, Elon?"
And I said, "Okay, ask him if we can do
a podcast." And we were there the next
week. Oh, incredible. Yeah. What do you
think of him as an entrepreneur? I think
he's the Thomas Edison of our age in
terms of uh in terms of his
um in innovative
ingenuity.
And I also think having met him a number
of times, I think he's a very good
person. He wants to do the right thing.
If I had to say one thing, he wants to
do the right thing to transform the lot
of most of humanity. And he started
uh w with Tesla, SpaceX and Tesla. SP
Tesla, you know, was a an environmental
move, which I think a lot of people
attacking his cars, who are probably
very um supportive of the environmental
movement, uh they they've forgotten
sending a a rocket to Mars and with
humanoid robots and ultimately people um
he thinks will
transform life on Earth as well Because
as we've learned from space history, uh
what we learn about material science and
technologies that help us break through
into these very difficult or problems to
solve is going to help us here on earth
as well. Uh so I think he's a very good
person and wants to do the right thing
that if I had to describe him that's
what I say other than genius of our
time.
I often wonder I you know because he's
had such a profound impact on the world
in many many ways through the companies
he started. I think the uh the biggest
risk really is just his own his own
health. He doesn't seem to sleep much
you know though he he says that he does
sleep. I think he he he he recommends I
think if I'm right on this getting seven
hours sleep a night. Uh uh and yes but
when when he is
focused you know it I mean people even
look they they there were many pictures
of him whether it was standing you know
with other policy makers and then he
zones into something and you know he's
zoned in and thinking about only that
and a problem that he wants to solve. So
you've invested what? Just over two
billion in Tesla. Let's see. So it would
be roughly Yes. In that region. Mhm.
Bitcoin. Mhm. You invested in Bitcoin
very very early. What was the the first
price what that you bought Bitcoin for
in I think it was 2015.
Yes. It was in um the summer of 2015. Uh
we got in at roughly
$250. Uh today it's
$104,000 I think roughly. So we did get
in very early and we knew we were on to
something really when people were making
fun of us saying okay that's a marketing
trick. You're you're new to our business
and you know new to our to the new fund
world and uh you're trying to attract
attention. And we were thinking wow they
have no idea how much research we've
done on this. and Art Laugher,
uh, my professor again from USC, we had
him, uh, we had him read our first white
paper on Bitcoin. Bitcoin, could it
serve the three roles of money? So means
of exchange, what we use every day uh to
to buy
things, store of value, uh like gold,
and unit of account, would prices be
quoted in terms of Bitcoin? Chris
Berniski was our first analyst on
Bitcoin, wrote the paper, art
read, and you know, from added to it
enormously in terms of economic theory,
which was great for us.
And then he said to us, he said, "This
is what I've been waiting for since the
US closed the gold window in
1971. A
rules-based
global monetary system like Bretton
Woods under the gold exchange
standard." And I said, "Art, that's a
very big
idea. How big is it?" and he said,
'Well, how big is the the monetary base
of the US? Back then it was 4 and a.5
trillion and Bitcoin's market cap or
network value was 6 billion. And I said,
"Okay, that's a very big idea." And we
were trying to get it into our
portfolios. regulators were hesitant and
uh but I bought it right then for for
myself and haven't sold it and I'm very
happy with it. You bought it for
yourself personally personally because
we couldn't buy it
$250. So, we couldn't buy it back then,
but we finally got through the
regulatory process and we were able to
put the New York Stock Exchange said,
"Okay, you can put a 1% position in the
portfolio and it was of a grantor trust
called
GBTC." So, we did and we just never sold
it. They didn't tell us we had to keep
it at se at 1%. So, Oh, it's risen to be
more than Yes, it it ballooned. And what
is it about Bitcoin that you believe was
and is still a a good investment
opportunity for the average person? Yes.
So at this at this price it's about a $2
trillion
uh market cap and so halfway to that
original $4.5 trillion. But our price
target actually has expanded since then.
Um because it's not just a global
monetary system. It is a new asset
class. And that's a very big idea as
well. What makes a new asset class? And
we haven't had one truly since uh
equities in the 1600s. When you say a
new asset class, you mean a completely
new category of of funding companies.
Yes. Right. And so an asset class would
be something like technology is an asset
class, right? No, it would be like
stocks, bonds,
commodities, real
estate. This is a new asset class and
most people will agree with that. We we
did a study on it. If this asset does
not perform like other assets, in other
words, it provides diversification for
funds and because it is behaving
differently, institutions have to
consider it uh because they're competing
against each other and if one puts it
in, they all know they're competing
against each other. So others have to
consider it. And uh we believe that part
of the opportunity has not been tapped.
And just to put some numbers on this,
right now we're approaching 20 million
Bitcoin outstanding, which means the
number of Bitcoin that uh have been
minted over time
uh by Bitcoin miners. So there's 21
million in total, right? There will be
at the end of the minting process
21 million. So we have only 1 million to
go. Yeah. Uh 1 million would be what is
that? That would be a hundred billion
dollar worth a little more than that
right now. So, just for someone that
might not know much about Bitcoin,
Bitcoin is mined using computers and so
far they've mined 20 million of them and
there's 1 million of them left to mine.
Yeah. So,
institutions really just started
considering Bitcoin because the SEC gave
the great uh the the green light uh to
Bitcoin with uh the the approval of the
spot Bitcoin ETF in January of last
year. And it takes a while for
institutions to do their research and
and commit. Uh and so they're just now
committing. And there's only a hundred
billion dollar of new market cap uh that
is going to be created whereas they have
trillions of dollars under
management. Um and so we think there
will be a lot of incremental demand and
uh to satisfy a lot of that demand
someone's going to have to sell which
means the price goes up which yeah if
people don't want to sell because
Bitcoin's been awfully good and our
forecast right now it's um right now the
Bitcoin is around 100
105,000 our forecast
uh for 2030 is $1.5
million. And we do that
uh the building blocks for that, the
three biggest building blocks are
institutional, we just barely
started. Uh store of value or digital
gold. Young people are much more uh
comfortable with digital gold than gold.
So on the institutional side that means
institutions, investment institutions
start investing in it, young people
start investing it in it as a way to
save and store their money. Yes. Yes.
And then uh the the the
the very important use case that many
people do not discuss is how important
bitcoin and stable coins which are
backed by US treasuries are going to
become to the emerging markets. uh in
emerging markets, many of them are at
the whim of policy makers who uh show no
discipline in fiscal or monetary policy.
And so they they're used to going
through booms and busts and booms and
bailed out by the IMF and they need an
insurance policy. So if you're in
Venezuela, you need a currency that's
going to be stable. Exactly. Well, this
Bitcoin is uh so stable coins are stable
visav uh the dollar u Bitcoin is more of
an investment
because it does appreciate over time.
Now you go through it's volatile no
question and that's the first thing
people have to know about it. Uh but it
is becoming less volatile as more and
more investors hold it. So, you think
Bitcoin will
potentially multiply in value by 15
times in the next five years?
Wow, that'd be pretty crazy. It's a very
big idea because it is a new asset
class. It does represent a global
monetary system unlike any other digital
asset out there. Um, it is backed by the
largest computer network in the world.
the the layer one which is the base
layer has not been hacked. Think about
that since 2009 when it was released not
been hacked. How many ho how many
systems can say that? And it is a
technology. It is native to the
internet. And
again digital assets or any Bitcoin,
Ether,
Salana, all of them exist because
they're vying to be the native
currencies to the internet and to to
enable smart contracts and really
transform the financial services
industry. Why did you invest in
Coinbase?
Coinbase is
um an exchange for for digital
assets and uh and increasingly
derivatives. It has just it has gone
global. It just bought Darabit which is
the largest options uh exchange out
there. uh and it owns a futures. So,
it's really going after uh the
derivatives market where there's a huge
amount of activity which is fantastic
because it's all legitimizing digital
assets and it is the most regulatory
compliant exchange in the world. Um,
Binance is a another major exchange, but
has had more run-ins with regulators
around the world and really hasn't been
allowed into the United States. It also
wants to
become part of the new payments
infrastructure and so is evolving
strategies that way as well. Um, we've
gotten to know management very well.
They fought the fight against regulators
in a magnificent way and they have
educated policy makers um importantly
who understand that this innovation we
almost lost this innovation to the rest
of the world because of our regulatory
stance. uh they've helped policy makers
understand that hey you know this this
infrastructure is what developers did
not build in to the internet in the
early 90s because they didn't know
finance or commerce would take place
that's all this is that simple right so
if I'm trying to invest in just to
summarize then if I'm trying to invest
in AI that your key positions there and
your key thoughts are companies like
Tesla I heard you invest in Twilio. Uh
we we had invested in Twilio. They had a
ma they had a management turnover. So we
moved away from that. But uh Palunteer
Palanteer Yes. Palanteer is a platform
as a service company which we think uh
is not only going to help governance
move governments move into the digital
age like our defense department and now
it's moving into other departments but
also these huge huge
enterprises because it's not forcing
them to rip and replace anything.
they'll build on top of whatever
technology infrastructure is there and
over time just usurp the role of the
legacy technologies. So very important
company we think in uh the digital age
it's had a very big run. We have taken
profits and you know while it was having
a big run Nvidia was selling off it was
down more than 50% so we put some of our
Palunteer proceeds in back into Nvidia.
Is there anything else in the AI bucket
when you're thinking about stocks? Well,
when you're thinking about uh chip
companies in particular,
uh TSM is the platform for chip
manufacturing. It doesn't matter who
wins. We we do think there are going to
be many more competitors to Nvidia.
Nvidia is still number one. Have you
heard about Grock? Oh, yes. Grock we are
invested in in our um in our private
fund. Oh, okay. So, just for people that
might be confused, do you mean with a Q?
Oh, yes. That's that's in our private
fund. We don't we do own Grock and
that's a very important company on the
inference side of um of the equation.
I've invested in Grock as well. Yeah, I
should probably disclaim that. Well, I
think I think you're going to do very
well. Um so TSM though is where all the
chip manufacturers go uh for production.
It is the most sophisticated
manufacturer of chips uh in the world.
Uh there is geopolitical risk there.
Most of its business is in Taiwan. It is
diversifying into uh certainly into the
US and I think even into Europe. Uh so I
think uh that will continue to be a very
important company as well. So, what are
the what are your what's your top 10 in
terms of public stocks that anybody
could invest in if you had to give me
your top 10? So, I'd have to give you
and they're listed on our website and I
won't go in order, I'm sure, but of
course Tesla, Coinbase,
uh Robin Hood, uh Roku is uh an
operating system for connected TVs,
highly misunderstood stock. Crisper
Therapeutics which uh is gene editing
gene editing for cickle cell disease and
uh betaththalmia
uh palunteer I think I've mentioned uh
in the AI software space archer just
moved into the top 10 it's the EV tall
company which and it also signed a deal
an exclusive deal on both sides which
was quite impressive uh with anderol
which anderil which is the u most
sophisticated defense tech play uh and
is growing like gang busters. So so
that's terrific. Shopify
uh which is a shopping platform back end
and really using uh AI Roblox. Oh that's
the one we're missing. Roblox
which is a game right? Yes. It's a
usergenerated gaming company. Uh the
fascinating and it's also a social
platform. Uh it started for children
younger than 13 years old. And what's
interesting about it is uh they've
stayed with it because 60% of its user
base now is above 13 which is very
interesting. It's the largest
userenerated
uh um content provider out there.
And what is fascinating about it is I
know one of my friend's daughter has
started her own dress shop on Roblox and
what she doesn't understand is that
she's she's learning about business but
she's also learning how to code
especially in this new vibe coding
world. So I think it's going to be a
very important uh company going forward.
The the interesting thing about
gaming and technology transitions is
that it is the only entertainment medium
medium that has not fallen apart with
technology transitions.
Um it has actually grown because those
who love their games from 25 years ago
still play them. It's grown with each
technology revolution. So, uh, and user
generated content in gaming is,
um, the next big thing. A business is
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I will speak to you then.
If you had $1,000 to invest Mhm. and you
had to invest it somewhere, where would
you be investing it?
Well, and how would you be like the
general philosophy towards wealth
creation at such a stage? If you had
$1,000, how would you be thinking about
creating wealth for yourself? A couple
of things. averaging into
um either an ETF. What's an ETF? ETF,
exchangeraded fund. So, it treats a
group of stocks like one stock. Mhm. So,
ARK
is it's nearly it's 35 36 stocks, but
you can buy them by purchasing ARK. And
you can do that on your mobile phone by
download. You can do it on your mobile
phone. A bunch of different apps allow
you to just buy that one ETF, which
means you own 35 stocks. Yes. And and
your team are basically choosing what
those 35 stocks are. Yes. Based on your
research, right? and ARK are our highest
conviction stocks. Uh, and they they
they offer an exposure to all of the
innovation platforms that we've talked
about. Whereas ARKI here in Europe is
focused primarily on artificial
intelligence and robotics because we
think that convergence is going to be
pretty explosive. what you don't get
there uh and you do get in
ARK we also have in another very focused
fund ARKG which is really healthc care
applications of AI um and and other
health care other healthcare names that
we think uh are going to be pretty
transformative in the new world as
regulators really understand how
important AI is going to become to
discovery uh research trials development
uh to diagnostic tests and to curing
disease. Another question popped up
which is about Ethereum and these other
cryptocurrencies. Do you invest in any
of these these others? Yes, we have uh
we have well in our public funds we've
put them I I don't think we can own them
here in the UK yet, but in the in the US
uh we have them in um some of our funds,
both of them. They're key to the
financial services revolution. So, uh to
get people to understand and feel
comfortable with that, uh we don't call
it the crypto revolution. It's the
digital assets revolution. And it's
simply the internet, the financial
internet. Okay. So that so we do we do
and do you believe are you more bullish
on the price potential of Bitcoin than
Ethereum? Yes, we think Bitcoin is the
biggest idea. It serves the three three
revolutions. Global monetary system,
they do not. Um new asset class, they
are part of a new asset class, but
Bitcoin is going to be the biggest. and
new technology. It's the most secure uh
blockchain technology out there. What
about all these other Salana and all
these other So, Ether and Salana. So,
the big three are the are those are the
the big three. Um and we think they'll
all be successful, all three of them.
Bitcoin the most. We're very interested
in stable coins, but that's just like
cash. Uh and you know, there are
millions of crypto assets out there. We
think most of them die. Is there any way
to invest in stable coins? Like how do
you invest them in? So indirectly right
now it is through Coinbase. They have a
deal with Circle. Um any any revenue
that Circle generates it's it's stable
coin is USDC.
Yeah. Any revenue they split 50/50 uh in
the US. uh circle itself has announced
that it is going public and so we're
looking forward to that and what's
what's the the sort of psychology or
mentality one has to adopt to be a good
investor depends what you've bought if
you buy a strategy like ours which would
be in the aggressive growth
strategy put it in you know averaging in
over time just like with Bitcoin as I
mentioned earlier uh averaging in over
time what does averaging in Averaging in
means, you know, buy a little every
month, maybe every
payday. I think one of my daughters was
buying Bitcoin every week, but not a
Bitcoin. She couldn't do that. A
Satoshi, you know, so and close your
eyes. Like you're this is a long-term
investment. If we're right, uh,
according to our analysis, now you this
is our research, our analysis. No
promises. We can't do that. But
according to our research, the
technologies around which we have
centered our research
uh and which have focused our
investments, they we believe will go up
more than tenfold in the next five to 10
years. And that's how much explosive
growth we have ahead of us as these
technologies converge and create
incredible opportunities for investors.
And you know I'm hearing a lot of invest
a lot of people um as they get into
investing of course they have their day
jobs but once they have acred enough you
know they're making choices about
dialing down their day jobs and spending
more time investing. You asked what are
some of the jobs of the future going to
be. I think individual investors are
going to be providing for themselves if
they are investing on the right side of
change. So if you're right, that means
that by investing your fund, I would
make a,000% return roughly. Yes. No
promises. But this is all based on
research and you can find it in our big
ideas. Uh big ideas 2025 is on our
website
arc-invest.com. Uh, and you can find a
lot more of information about our funds
on arc-funds
uh.com. And I should probably say this
is not in investing advice. It is not.
And and I want to do your own research.
Do your own research. You can lose all
of your money. Yes, you can lose all of
it if you decide to do any of these
things. But that's why we put Arc Dash
Invest separate from the fund site
because that's just research. learn
learn what you're investing in or learn
why we've invested
uh the the way we have you know that's
that's what we do all day long is we try
and help well first of all we're doing
the research we are making the
investments but I think one of the most
important things we do is communicate
what we're doing and why we're doing it
what do you think of Trump tariffs
everything that's going on in America at
the moment, what's, you know, for the
average person, should they be
concerned? Are you bullish? You think
Trump's got it right? If you look at
what happened to the equity market when
Trump was elected, the stock market,
yes, the stock market, it went crazy to
the upside, as did our strategy.
And why the promise
was deregulation and that I think is
underestimated uh how important it is
because we're strangling in regulation.
It's just this is not our DNA. We we got
to get out from under this. Lower
taxes, lower interest rates is what he
wants, of course. Um and lower tariffs.
What he didn't tell us was exactly how
he was going to go about that
process. And it has it has felt
chaotic. And I've had to go out and
explain what's going on. Try to explain
what's going
on. And I I have to tell you, it scared
me silly to see what was going on
because I knew that
businesses were paralyzed and that we
could have a mess on our hands. And I
certainly communicated through my
channels. Art communicated through his
channels. In fact, I think in one
publication he said, "I have never been
more scared in my career." And we were
trying to really get into Trump's head
and and I know President Trump listens
to art, but he also listens to a lot of
other people, one of whom was Peter
Navaro, who seemed to have a hold on
Trumpet when it came to tariffs. And yet
when I saw Treasury Secretary Bessant
really push aside Navaro and that could
only happen with Trump, I knew we were
going to be okay. I knew we were going
to be okay because throughout all of
this chaos, I think what he is trying to
do is not only get tariffs on the US
down throughout the
world, but maybe more important, get
non-tariff trade barriers down. Like for
example, I didn't even know the UK would
not accept our beef or ethanol.
Well, now you're accepting our beef and
ethanol. I I don't know if I don't know
if people in the supermarkets will buy
it, but uh anyway, this one, but other
countries much many many more non-tariff
trade barriers. And so he is just trying
to bust that up, you know, make it more
visible. You know, for example, Canada,
I think they charged a 250% tariff on
our milk.
And one of President Trump's promises
was to take care of the farmers. Okay,
that's why you see the rhetoric around
Canada. Now, do I agree with his
style? I would never do it that way. I'd
never do it that way. I And it was
unfathomable, you know, for me because
he is sensitive to business and he must
have known that everything was going to
stop. And uh but he also knows that he
has to sound crazy for other people to
take him seriously. And he has and
people have to believe he will do crazy
things in order for people to take him
seriously. And he does do crazy things.
So do you think it's going to work out?
I do. You do? And I think the stock
market is beginning to smell it. If I if
I just had to invest in one stock right
now, what stock would you recommend I
invested in?
Okay. Well, I have to give you our
portfolio pick. So, it would be Tesla.
It would be Tesla if I if I had to give
you one stock. Okay. Interesting.
Because think about it. It is it is a
convergence among three of our major
platforms. So, robot robots, energy
storage, AI, and it's not stopping with
robo taxis. There's a story beyond that
with humanoid robots. and our $2,600
number has nothing for humanoid robots.
We just thought it'd be an investment
period and you know the re but I think
he's going to start generating not only
productivity gains internally but
revenues from humanoid robots. What are
you concerned
about in terms of the way that the world
is going and everything that's
happening? What are the things that keep
you up at night? I've got many a
concern. So, I've got many unanswered
questions and worries about how things
might play out, but keen to hear yours.
I am such an optimist. I really do have
to dig down deeply. If you had asked me
this a few weeks ago, I would have said,
you know, this tariff situation is going
to blow the global economy up if we're
if we're not careful. So, I'm much more
settled about that right now. I'd have
to say I am
concerned that there are going to be
people caught out
um by these new technologies and for
whatever reason not willing to adapt
because there are going to be huge
opportunities if they do. And so one of
the reasons we give away our research,
you know, I'm very honored to do a
podcast like this is to get that word
out. There is so much information
available. You can just go to our site
and listen to our podcasts and if
anything inspires you. Go for it because
it's going the opportunities are going
to be enormous. When you say you're
concerned people might get caught out
caught out in you know disrupted
industries. I mean we think the whole
transportation industry is going to be
disrupted. Um we think retail as we know
it's going to be disrupted as we retail
is in like shops and stuff and yes
although if they adapt with more social
personal experiences I think that
anything physical you'll want to have a
social dynamic associated with it but in
terms of what I think is going to happen
to retail is we're going to have our
personal shopping assistants and they're
going to they're going to anticipate ate
what we want, which I can't wait. I hate
shopping. Uh, anticipate what we want.
Uh, or basically flag something that
they know we would like if we knew it
were available. And they'll be
disintermediating all of the traditional
sources because they can go anywhere in
the world. Um, so just think about
almost every sector is going to be
disrupted. Healthc care is going to be
disrupted enormously, I think, for the
better. for the better. But those who
are wedded to doing things the old way
are probably going to be disrupted, you
know.
Yeah, that is my concern as well and and
just how we handle that as a society.
But I think if we can help people
understand that they have a lot of
control over this if they're willing to
learn and dream and use their
imaginations. Not everybody is though as
you know but they have to do it for
their children at least right if we took
the general population in London and
said 100 people how many of you
understand what AI is or how many of you
use chat GBT we'd have a certain
percentage maybe I don't know 50% or
more if I went to the countryside yes
and I stopped a lovely person shopping
in their local village and said do use
chat GBT it'd probably be significantly
lower percentage they they would care
about that? What is that? Whatever. Um I
I wonder about the inequality of
like education but just initiative and
how those that really do have a
proclivity to lean in and to experiment
and to mess around and to learn because
maybe there's an incentive because they
work in a city and their employees
asking them to will or be off to the
races with this disruptive technology.
And there's just like a lot of the rest
of society of middle America and the
countryides and those types of people
who are just not even going to see it
coming. But that's why we're out there.
And the the important word that you used
was initiative because I really think
you know when people hear the word
inequality
uh they like to blame something, right?
There will be no reason for this. I'm
sure someone's going to come back at me
for saying that, but of course there are
people who who we have to help along the
way. No question about it. But for those
who are healthy and uh are listening to
this podcast and are saying uh you know
I don't I don't know exactly what she's
talking about but I'm going to start
reading up on some of these new ways of
doing things and make sure to at least
understand it. I think within that kind
of initiative they'll find it. They just
will find it. There's going to be so
much opportunity. It's going to be so
exciting and I think again creativity
and you know especially young people
using their imaginations you know
they're they're not held back by any
preconceived notion. So I ask all the
questions I ask because I'm trying to
like solve little question marks I have
in my head about the future and it's
really difficult at this time to see
around the corner because so much is
changing so quickly and there's all of
these converging technologies as you
describe like robotics and AI and then
when I put robotics and AI together I go
[ __ ]
do you know what I mean? Because there's
like I keep coming back to this question
of like what am I going to do and not in
you know what's good about that? You
know what's really good about
that? That will motivate you. It does.
Of course it does. It's great. It
motivates me to ask people like you the
questions 17 times in a row to try and
find the answer. But it's a real point
cuz I run businesses. We have at our
headquarters which is around the corner.
It's about 25,000 foot office. we have,
you know, hundreds of people in that
building and I'm thinking about the
roles that we're hiring for and I'm
we're now looking at them through the
lens of agentic AI, so AI agents and and
then if I overlay that with robotics and
AI and you know I'm what roles would we
need to hire in the future because
theoretically like can you name a single
role in a media company that would when
I'm talking about in the robotics era
that would really need to be done by a
human I guess other And one could say
humanto human sales will still have some
kind of element of human touch to them.
You know though I mean we've learned a
lot from the ancient game of go. Yeah.
So you've heard about Alph Go which was
uh Alphabet Google um basically devising
a program to compete against the Go
champions. Go is much more complicated
than chess. Yeah. It's like a game, a
board game basically, right? So I think
the the champion of the world at the
time was a South Korean and he was sure
he was going to beat this m machine.
Well, the machine bit beat him and he
was
crestfallen.
And then he got
his to use New York word back and he
said, "Wait a minute. I'm going to start
playing against
machines." And so now he's playing
against machines. His game is so much
better that when he competes against
humans, and those competitions are the
more important ones, right? when he
competes against other human beings, the
machine has kept him at his champion.
And of course, everyone's using the So,
we're all we're going to artificial
intelligence. But he still can't beat a
machine, can he? He still can't beat the
best machine in the world. No, he can't.
And but I mean, he can occasionally, but
but people don't want to go see machines
competing against machines. I get that
in because human humans like human error
and they like to be able to relate and
to aspire. But as it relates to the
world of work, the incentive is
productivity. And my my humanoid robot
isn't going to get sick and it's going
to have a PhD in everything. So I don't
want to see a human failing at their
desk. I want the humanoid robot. Right.
Right. Right. Right. Right. But then you
your your robot and your AI is really
focused on the past. Right? That's what
it's ingested. It can make predictions
though based on that pass pattern
recognition, which is how my brain
works, right? Like a neural network.
But that's why we chose the word
disruptive. Disruptive means the
traditional world order and patterns
therefore that you know the the robots
and others will recognize is going to
change. Right. I'm sorry. What does that
mean? as so what when we're doing our
research we have a white sheet of paper
there's no history for this right and so
we're doing a lot of original research
so AI machines might use our research as
there because we put it out there but
how does the AI think differently to to
a human though in terms of is I thought
the human brain was building you know
predicting essentially something based
on lots of information and AI is
basically doing the same thing with
neural networks It's making a prediction
based on lots of new information and
therefore if we get to AGI it can create
new information. Yes. And and and it
will but I mean AGI Elon will say it's
two years away and it does seem you know
we're able to generate PhDs and rocket
scientists now in the AI world. So he's
probably right. But I also think about
this as giving us super intelligence.
So, could chat GBT do what we've done?
Maybe. I don't know. Actually, it's a
very interesting exercise. I'm going to
ask our team to do that before I put it
out. uh to do to do a model, a SpaceX
model, financial model, income
statement, balance sheet, cash flow
statement between now and 2050 when we
have in 20 in the 2040s Elon, if not
sooner, to colonize Mars. Uh I I'll see
what kind of model it comes back with in
terms of how much in terms of how
correct it is and what it uses to get
there.
Okay, I'll do that now. SpaceX,
a financial
model or income statement. Okay. Income
statement. That's the really smart
model. Let's do 3.0. Make a space.
You're an investor in SpaceX. Yes. In
the private fund. Yes. So am I. Make a
SpaceX uh income
statement. income statement based on uh
Elon's predictions. Yes. Elon's
predictions. Yeah. This will be very
interesting now until 2050. Mhm. Okay.
I'll put that on the screen so everybody
can watch. And this is essentially going
to look at everything he said about
going to Mars and colonizing Mars and
then tell you how valuable that
company's going to be essentially. Yes.
I'm not sure if you asked the question
that way. Did you Did you say I just
said make a SpaceX income statement
based on Elon's predictions from now
until 2050 and then I can ask it what
the market cap would be. I wonder how
long it's going to think. It's thinking
for a while. Yeah, it's going to think a
long time, I have a feeling. And then
it's going to take you through. And I
think uh you know what was interesting?
Deep Seek
uh the breakthrough it had on the
reasoning side was it kept asking
questions so it could get to the right
answer faster. Mhm. I think they're all
adopting it now because because Deep
Seek's open source. Yeah. And they
didn't need to spend much as much money
on the training side because they That's
what they say. They said $6 million
trained on a high-end workstation. And
that that of course caused a trillion
dollars worth of damage in the US market
with Nvidia, one of the biggest uh
casualties because people said, "Well,
wait a minute. We're doing these data
centers. You mean we don't need all
those big data center servers to to do
this work? We could do a high-end
workstation for $6 million. The answer
is the pre-training for that model was
done on a 50,000 GPU cluster that the
hedge fund had. And the last step of the
large language model was the $6 million
step.
Okay, it's made its mind up now. Oh, so
it says Starlink revenue in 2050 would
be 250 billion. Mhm. It says launch and
Starship revenue would be 120 billion.
So the total revenue would be 370
billion. Cost of goods sold would be 172
billion. Gross profit therefore would be
200 billion. Operating expense is 37
billion. Operating income would be 161
billion. after tax. So the net income
would be 128 billion. All
right. And I have to to be honest I
haven't seen the last stage of this
model. We haven't that would be very
interesting. I'd love to get a a copy of
that. If you could send it to me 100%
I'll email it to you straight after. You
know when I asked Chat GBT earlier I
said who is the number one woman in the
world in investing? It repeatedly said
your name. So that's a pretty remarkable
thing to have accomplished, especially
in a male-dominated industry where there
isn't many women that managed to rise to
the top of that
industry. So what what is it about you
in hindsight? You know, it's difficult
to be objective about oneself, but what
is it about you that meant that you were
successful in a male-dominated industry,
in an industry that's incredibly
difficult to be successful in? My advice
to all young people getting into their
first job especially, but even later
jobs is my mission when I started was to
make my boss look brilliant. Now, why do
I why do I say that? It's much more
applicable today and possible today than
it was back when there were no computers
and no cell phones, which is when I
started, right? But what did I do? My
boss wanted to communicate. He was an
economist. Wanted to communicate in
charts that, you know, he couldn't find.
So, I figured out a way. I went to our
time sharing system. That's all you
could do back then. Time sharing is an
ancient mainframe technology. And I
figured out a way to make these charts
and delight him.
And and and I loved doing it. And I
loved learning. I loved learning about
technology. I learned tech and about
economics uh through him. So that was
the first thing. And then why is it
important to make your boss look good?
Well, I think because if you do make him
look good, um first of all, you should
you owe him a debt of of gratitude if he
turns around and gives you more grow
growth opportunities. So, but if he or
she doesn't, then you know it's time to
go to the next place where you make that
next boss look brilliant and maybe you
have the growth trajectory. I had bosses
who they they love the fact that I loved
what I was doing that I had such high
conviction in what I was doing and I and
I'm going to give Art Laugher a lot of
credit for that. When I walked in to the
financial
world, I knew more about economics than
most of the people in the room. And that
was a great source of confidence. A
great source of confidence. And when I
was leaving that firm, uh, someone said
my my boss at the time said, I was
moving from LA to New York. My my boss
said, "You've only been doing this for
three years. You're not ready to become
their economist." And um and I just
thought I was ready. And more important,
the company to which I was going thought
I was ready. And as I was leaving um
both he and and others said, "Remember,
you know more about economics than
anyone else in the room. You'll so take
that with you." And I did. And I think
that sense of confidence in
understanding the way the world works
from a macroeconomic uh point of view
was critically important. Now when I got
to New York, I could not even speak Art
Laugher's name because the LER curve
says if you cut tax rates that are too
high, you will get more revenue. And
what had happened is Ronald Reagan had
cut tax rates, but Paul Vulkar at the
Fed was trying to starve the economy of
inflation. So we were in backto-back
recessions and no, the government wasn't
getting more revenue. So Art Laugher
was, you know, on I I couldn't say
anything, but you know, it was fine. I I
knew he was going to be right and we
were right. That was the story of the
80s and 90s. And that's why uh Jennison
Associates and the chief investment
officer there uh Sig Sagalis um gave me
an opportunity to get into equity
research. I wanted to grow. I loved the
stock market and he loved my conviction
and so he started me on cyclical
companies which of course I would know a
lot about. But Jennison was primarily a
techoriented firm and of course knowing
that I wanted to delight the boss. I
wanted to get into the technologies and
I made it my business to know as much
about them and and I was the only one
willing to uh research stocks outside
the US. Think about that now.
Art
Lather Arthur Ler. Yes. He wrote this
letter. Oh, he did. He wrote this letter
describing you. Oh, to you? To me? Oh.
He said, "There was this young lady
named Kathy Duddy, later Kathy Wood,
whose face was the map of Ireland, and
whose ambition was over the moon. I was
a tough teacher and grader, and Cathy's
first steps were shaky, but in short
order, she rose to the occasion and aced
the course. impressed as I was and
believe me I was very impressed. I
helped Kathy land her first job at
Capital Group in LA and from that point
in time it was game on. I followed her
career closely after Capital Group then
on to Tillo and her final job as an
employee at Alliance Alliance Bernstein.
As you may imagine, she was the star
investor at each stage. And in 2014,
Kathy took a giant entrepreneurial leap
in the founding and funding of Arc
Invest. And the letter goes on to say,
"She's a mega success and God bless her.
She never has forgotten her now aged
professor."
Well, that was very nice of him. Um
uh so he he has been so important to my
career. Now I'm going to get a little
weepy, but um I gave him 1% of my
company when I started it. And uh so he
deserved it. He deserved it because he
gave him a big big break. He believed in
me first. Why does that make you
emotional?
I don't know. We have we've gone through
our life together and what's so
interesting now is
um so interesting and and fun
is Bitcoin has
rejuvenated art. He's 85 years old or
84 and I'm seeing his excitement and he
wants to spread the word around the
world and now we're going into stable
coins together
and he just started an account on X. He
has a flip phone. He doesn't do email
and yet he has just started an account
on X. And so we now have this technology
relationship because he wasn't going to
technology but he knows he's seen like
Arc alto together we have 3.3 million
followers and he's seen the reach that X
has and he's also I think the other
thing and I'm I'm haven't answered your
question. It's just very nice of him to
do that you know I see it's a typed one
page and very sweet. We have a closing
tradition on this podcast where the last
guest leaves a question for the next
guest not knowing who they're leaving it
for. And the question left for you is
great question for you. What is the
craziest
idea you ever had that turned out to be
right?
Well, there are just a a few one thing
that it's it's not that crazy, but it
just gives you a sense of how not
obvious in the early days of
ARC. I remember saying I remember
saying, "Well, you know, autonomous
vehicles are robots."
And I was in a research meeting and
everybody said, "No, they're not." And
of course they are. You know, it's a
crazy idea, but and there was something
I mean there some things I'll say and
the reason that's important from our
point of view is this convergence idea,
robotics, AI, energy storage. It's wait
a minute, this is a very big idea. So it
seemed it seems like no. It's like I
think it is. And and so it was like we
were we were, you know, feeling our way
in the dark because that was 2014 and
nobody was really talking about them.
And there's something like that very
recently. Oh, we were talking. It's not
a crazy idea. It's just we're trying to
solve problems. Um
someone as we were going on and on at
our brainstorm on Friday about humanoid
robots, uh someone he he's our um what
do we call him? What do you call
kermagin? Uh, no. Good way. In a good
way. I don't even know what kmagin
means. Kromagin means kind of contrarian
or kermagin like yeah yeah yeah that's
not going to work you know. Um he
humanoid robots. He said he said I don't
think that's going to be a thing. He
said, "We really need robots that are
going to be able to carry a lot more in
terms of weight than those things will
on those stilts." And in my mind, kind
of flashed
um transformer robots, they'd have legs
and all of that. You'd be able to fold
them up so they look like a tamp tank.
Mhm. And so that's what I said on uh I
know this doesn't sound so crazy to you,
but uh I don't I just imagining the
future going to Disneyland when I'm 11
years old. We had just come over uh from
Ireland and seeing someone holding a
phone on the carousel for progress and
you know saying I'm going to have one of
those. Um, it sounded crazy at the time
and I felt a little crazy but always.
So, you think we're going to have
transformer robots? Yeah. So, the robot
that cleans my house can transform and
maybe become and everybody laughed at me
but I think that's going to happen.
Another one was and this was on these
are just little ideas in terms of how
things hit my brain but uh someone was
talking about boring which is another
one of Elon's companies the underground
transportation thinks tunnels and stuff.
Yeah, I forget what someone said in a
post on
X, but I my answer was Mars obviously.
And people were laughing at that. And
then as they were talking about they're
saying, of course they're going to put
that transportation system underground.
We learned why you shouldn't have it on
top of the ground from Earth. So just a
little things look catch me in a funny
way. It's not the craziest. They're just
like, "Oh, maybe that is the way things
are going to work." I wonder if if Elon
dies before we get to Mars, or if he
just dies in the next 10 years from
anything, from any cause, how much of an
impact that will have on our rate of
progress generally with space and
electric vehicles and humanoid robots
could be quite profound. He is getting
us so far along that, you know, there's
just going to be a runway he's created
for years and years. Think about it.
Mars 2040 50 you know
Kathy thank you thank you for doing what
you do and um that's a a sort of
multifaceted point of gratitude because
you do so much um you do so much in
educating all of us in terms of
innovation investing and what the future
looks like but also from your fund's
perspective and your company's
perspective you do so much in open
sourcing and putting the research and
the work that you guys do out into the
world when you don't necessarily have to
but as I've heard you say it's a great
benefit both to the world but also you
do it because it also brings people to
your fund right and um it certainly did
for me that's how I came across you many
many years ago when I had was reading
some research with my brother um around
investing in the future and innovation
and understanding your thesis around all
of those things but also from the
education side you're distilling this
complex research into simple um language
and information that the next generation
can understand so that this moment of
transition doesn't catch them off guard
and that's an incredible thing but I but
I have to say as well you're such an
inspiration for the very fact that you
have achieved what you've achieved in
your life. It's it's exceed it's
extremely rare for someone and I don't
always like to talk about gender or race
or the those kinds of things but it's a
point of it's a particular point a
pertinent point in this case because you
have succeeded in a very maledominated
industry and I think just your presence
your existence alone is going to inspire
lots of women um and men people like me
um to pursue finance and investing as a
career. So thank you so much for doing
what you do and thank you for being who
you are. It's incredibly important and
you've demystified so many things for me
over the years even though we've never
met. Um, but watching your videos and
reading the research that you guys put
out. So, I'm going to link all of that
below and linked your websites and your
funds and all those things so people can
learn more. But yeah, thank you. Thank
you, Stephen. Thank you for doing what
you do and and it's been an honor and a
privilege and I know you have an
incredible audience. So, you've built a
fantastic business here, and I have a
feeling uh that this new world that that
you're fearing is going to be very good
to you. I hope so. Yes. Thank you.
The hardest conversations are often the
ones we avoid. But what if you had the
right question to start them with? Every
single guest on the diary of a co has
left behind a question in this diary.
And it's a question designed to
challenge, to connect, and to go deeper
with the next guest. And these are all
the questions that I have here in my
hand. On one side, you've got the
question that was asked, the name of the
person who wrote it. And on the other
side, if you scan that, you can watch
the person who came after who answered
it. 51 questions split across three
different levels. The warm-up level, the
open up level, and the deep level. So,
you decide how deep the conversation
goes. And people play these conversation
cards in boardrooms at work, in
bedrooms, alone at night, and on first
dates and everywhere in between. I'll
put a link to the conversation cards in
the description below, and you can get
yours at the
diary.com. This has always blown my mind
a little bit. 53% of you that listen to
this show regularly haven't yet
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much.
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