now Mari where are we going to make money going forward. Well, so in our business, the theory is relatively straightforward, which is we make money on technological disruption. And so we make money when these new upstart startups form and you know either try to take down a big incumbent or try to create some kind of new market. And so that's what we do. I think for the world at large, the challenge is just that there's a fundamental supply-demand imbalance between the amount of capital, you know, seeking productive economic investment opportunities, and then the number of those opportunities. And so I think there's a very large macro problem on making money in the economy. And tech and venture capital can only be a small part of that answer, but hopefully we will be a part of that answer. Yeah, well, you are sitting in the middle of Silicon Valley and you kind of invented the Internet. So kicking off

the AI question just how will the AI raise pan out here yeah so the theory and the Hope um certainly that we're betting that we're betting against and investing hard against um is that Ai and specifically these new breakthroughs around AI like generative AI U represent a new platform and in the tech industry that's a sort of very powerful concept uh because the idea of a new platform in the tech industry is sort of a new foundational technology um that you can then imagine Reinventing thousands and thousands of application categories on top of and the tech industry historically um has been fueled by these platforms you know the original one was the Mainframe computer that then led to mini computers client server computers personal computers mobile mobile computers um and every time there's a platform shift There's an opportunity to reinvent the industry and reinvent basically the entire ecosystem and all the different ways that people use technology and create an entirely new generation of companies

and so we certainly believe that AI is a new platform shift. We believe that AI is one of the really big platform shifts. We think this, you know, might the possibility exists that this is on par with the microprocessor. Um, and so, you know, we think there's an opportunity to take a very broad perspective here and invest in many different, um, both core technologies and also use cases of AI. Where is the kind of fight going on just now? What, uh, is it about chips, some money, or people, or electricity? Just what exactly is it? Yeah, so the most dramatic thing about this sort of AI shift is that it's what I call an 80-year overnight success. Um, and so the original paper on neural networks, which are the foundational technology of AI, was actually written in 1943. Um, and then you had over the course of the last 80 years, you had entire generations of researchers who basically try to make AI work and for the most part

weren't weren't able to do it. Um, in fact, when I, when I was in school, you know, 35 years ago, AI was a, was a discredited field because there had been an AI boom in the 80s that, that, that didn't pan out. Um, and so it's, it's an, it's a, it's a technology sector that's sort of been in search of, of working products for a long time. Um, essentially what happened was the breakthrough moment was in 2022, and it was the, it was the chat GPT moment. Um, and so it was, you know, it's actually 7, 79 years into the technology, but it was a breakthrough moment, and then it was a breakthrough moment of it went basically from not working to working incredibly well in one step. And, you know, the, the technolog is not perfect yet, there's still a lot of work to be done, but it fundamentally, you know, these products are just incredible already in what they can do, and, and they're far better out of

the gate, then the than you know, the microprocessor was or the internet was, um, and so it's this kind of rare situation where you have this dramatic leap and functionality happening extremely quickly, um, as a result of that, basically every part of the tech ecosystem is trying to react and trying to figure out how to incorporate AI or trying to build on AI or trying to, you know, basically compensate, you know, figure out how to, how to compensate for weaknesses in AI, um, every single sector of the tech industry is reacting right now, um, there is a, you know, massive chip, you know, shortage, this is the biggest Supply demal Supply demand in balance and ships that we've ever seen as an industry, um, and so there's a massive fight happening there, there's a massive, you know, wave of data center Innovation development, there's actually power, a lot of people are now trying to figure out how to power and cool these giant data centers, there's actually Resurgence of in nuclear power, um, around these data centers, um, and then there's there are

there are basically fights happening up and down the software stack. You know, that the fight that gets probably the most publicity at the moment is the fight between the software companies building the so-called Foundation models. Um, and so, and there, there's sort of a big fight between a view of the world in which there will be a few big models that basically win everything, and then an alternate view of the world in which this is more like the microprocessor, and there will actually be, you know, many, you know, thousands of different models running on billions of devices. Um, you know, of many different shapes, sizes, descriptions, customized in various ways. Um, and, and actually, that latter thesis is a thesis we're investing against very aggressively. Now, you said last year that we should just stuff AI into everything we do, like weapons, cars, everything, in order to beat the Chinese. What do you, could you tell us about it? Um, and so, you know, I think this is very straightforward. Like we, we need to win. We need to win by being better technologically, better economically, and

better militarily AI has been identified as the core technology, uh, for the future of the nation-state by both US military planners, by the Pentagon, um, as well as by, uh, you know, the Chinese planners. And so, it will be one of the main areas, uh, in which these, you know, these kind of two, the two hemispheres compete. And, and, and I think it's important that we win. Where do you think the West is now relative to China? So, the West has, I would say, all of the advantages and disadvantages of a decentralized system, uh, and a market economy, and a, and a sort of a system in which governments don't control everything. Um, and you know, the huge advantage of that is innovation and entrepreneurship. The disadvantage of that is, you know, it's very difficult for our systems to plan. You know, there, you know, there is no top-down American Technology strategy, there is no top-down European technology strategy. Those concepts are kind of, you know, antithetical to our systems. U

so we're very robust and dynamic in general um, but you know we're very messy. Um, the Chinese have both the advantages and the disadvantages of a centralized system, much like the Soviet Union did. Um, you know, they have a command and control system where the Communist party, you know, owns and controls everything, and they can direct their private companies to do whatever they want, which they doing right now, you know, with sort of increasing force. Um, and then they have all the disadvantages of a centralized system, which is, you know, they have a command system. Um, you know, they're actually in the process of trying to crush their entrepreneurial system right now. They're, you know, they're trying to basically drive their entrepreneurs, you know, out of, out of, uh, you know, in many cases out of business, in many cases out of the country. Um, and so it's, it's just like, like the Cold War with the Soviet Union. It's an asymmetric situation. Each side brings strengths and weaknesses. And then I would say, you know, each side is tempted.

to embrace the model of the other side, to try to get the advantage of. So, the Chinese have kind of fake entrepreneurial system, uh, you know that they kind kind of try to Foster. And then we have this sort of, you know, you know, sort of U, not very effective, you know, Central planning function. Um, you know, in, in, in DC and in Brussels, uh, you know that doesn't work very well. And, at least, I would argue, we should lean into the strengths of our system. Um, and you know, and and try to benefit from the fact that we should have a much more Dynamic economy. We should have much more entrepreneurship. Um, and and hopefully that's that's what we'll do. Talking of um dynamism, you when we met, you also talked about the importance of investing in American dynamis. And I guess that also goes for European dynamism. What what do you mean by that? So, you know, look, both both the US and EU, I mean, we're we're we're, you know, we are the result of the Industrial

Revolution, right, we are a result of the first Industrial Revolution, with things like steam power. We're the result of the Second Industrial Revolution, you know, with things like electricity, were the result of the of the computer age. Um, you know, in the last 50 years, I think both American society and EU Society has sort of lost faith in the idea of technological progress. Um, and lost faith, frankly, in the idea of economic progress. And, you know, decided to become, let say, I don't know, much more, you know, cautious, much more risk-averse, um, much more, you know, sort of unwilling to think of change as a positive and exciting thing. Um, and, you know, you actually see that, I would say, in America right now. You know, the relationship between industry and the government is at a 50-year low. It's, it's, you know, think the actually quite quite a large amount of hostility between government and Industry. And the same is certainly true in Europe. Um, and, again, you know, our

view is like look we you know we need technology. We need technology. We need Innovation. We need markets. Uh, we need these things to function, why? Because we need growth. Um, you know we, we, we want our societies to grow. Societies, we want people to think that there's opportunity. We want people to be able to think in positive, um, uh, some terms, you know, we, we don't want people to think in terms of like, for me to get something, I have to take it away from somebody else. We want to, you know, think about our society as societies that can grow and flourish, where our children will do better than we do. What would be the key to get Europe to become more Dynamic? I mean, not that we are not dynamic in Europe, but, uh, well, compared to Silicon Valley, we seem to be lagging a bit behind here, yeah. So, look, if you, you know, if you did a rank order of the top 50 technology companies 30 years ago, a large percentage of them were European. I think it was about 40%. Um, if you did a

rank order today I think it's one out of 50. Um, and so, you know, Europe, Europe is really falling off. And, and I guess, the way I would describe it is, it seems, at least from the outside, it seems to be almost entirely choice, uh, which is, it seems like it's been a choice to sort of prioritize regulation and risk aversion and the precautionary principle over, um, you know, over innovation. You know, the most acute version of that, obviously, is the energy sector, um, you know, with the sort of, sort of voluntary stand down of energy development, which, you know, I think has led to, you know, real geopolitical stresses with respect to Russia. Um, and so, you know, I, I look, I think, I think it's been a choice. I think that, I think the political leadership class in, in, in, um, in, in Europe has decided that they, they want this, the voters so far have supported them in wanting it. Um, you know, it has, it has consequences. I think the consequences are becoming clearer. I think, you know, fundamentally, it's a

choice at a societal level, and you know the voters will either step up or they won't, and the leaders will either step up or they won't. But, but, but I think the results of the current approach are in, and I don't, I don't think they're very good. Mark, finishing off with a completely different tag here. Uh, in one minute, how can we become better investors, because that's the theme of the conference, yeah. So, I think the question always, I, I think the question for sort of large institutional investing, the question is, you know, deployment of large amounts of capital. There just are not that many places in the world to get growth, um, and so, you know, the fundamental challenge every large-scale investor I talked to deals with is, you know, most of the capital that they invest, um, you know, just kind of by definition can't go into high-growth sectors, um, just because there aren't that many high-growth sectors. They're actually, you know, quite, quite hard to find, um, and so there are a basically a

small number of places in the world that have growth. There are a small number of people who are starting the kinds of companies and trying to build the kinds of industries that are going to be able to deliver growth. You know, I think focusing in on the specifically the places and the people who are going to be able to generate growth. And then, quite frankly, the other thing is um, you know, it's very helpful when these investors also weigh in more broadly than just with money and also weigh in with their influence and you know, with their with their level of authority and their level of of you know persuasive capability and so forth in their societies. Uh, you know, the growth is something that we should be aspiring for and that is actually good not just from an investment standpoint but from a societal standpoint. Fantastic. Well, uh, big thanks for sharing your thoughts with us and uh, you know, all the best of luck going forward. Great, thank you very much. It's great to be with you guys.

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