Stanley Druckenmiller: AI might be a little over-hyped now, but under-hyped long term
Your excitement about about AI sort of came into play with that discussion because you’re worried that it’s going to take a lot of investment and there’s no savings. We got to build up the defense, there’s wars everywhere. And you you were early with NVIDIA, you were early with with AI. You you paired back a little bit, but are not less bullish on the prospects for it, are you? Well, first of all, I wasn’t early with NVIDIA. My young partner was earlier than NVIDIA. He called me in in the fall of 22 and said that he thought all this excitement about blockchain was going to be far outweighed by AI. And I asked him how to play it and he told me I should buy this company, NVIDIA. I didn’t even know how to spell it. I bought it. Then a month later, ChatGPT happened. Even an old guy like me could figure out OK, what that meant, so I increased the position substantially. I said in an interview in June of that year that I expected to own NVIDIA for two or three years, that this was a mega trend like I’d never seen, potentially bigger than the Internet. But when the stock went from 150 to 900, I’m not Warren Buffett. I don’t own things for 10 or 20 years. I wish I was Warren Buffett and 150 to 900, yes, we did. We did, we did cut that position a lot of other positions in late March. I just need a break. We’ve had a, we’ve had a hell of a run. A lot of what we recognized has become recognized by the marketplace. Now Powell was we expected Powell to come back and re pivot which she subsequently did. But no, long term we’re as bullish on IAI as we’ve ever been. I also you just wonder if we were all sitting here in 1999 talking about the Internet or anybody who’s talking about it, I don’t think anybody would have estimated it would be as big as it got in 20 years. We didn’t have the iPhone, we didn’t have Uber, we didn’t have Facebook. Yada yada. And yet if you bought the NASDAQ in 99, it went down 80% before that all came to fruition. That’s not going to happen with AI, but it could rhyme. AI could rhyme with the Internet. As as we go through all this capital spending, we need to do the payoff. While it’s incrementally coming in by the day, the big payoff might be four to five years from now. So AI might be a little over hyped now, but under hyped long term. You said you’re not like Warren Buffett, but what you just did with NVIDIA sounds an awful lot like what he did with Apple. He paired his position in Apple by 13% and they went on to say it’s a better company than Coca-Cola or American Express or any of the other companies that they have in their portfolio. And he thinks Tim Cook is great. Yeah. Well, I will be very surprised if I don’t own NVIDIA on and off the next 10 years. You’re you’re so bullish on AI that Andrew you did a a a great interview with Perplexity and and I think that that’s where you decided might be a place that that that you want to be. I love Perplexity. Again, a funny story. My young partner, the one who has basically been behind all our AI play, went with with his, with his staff. He told me, I don’t know, in January that all the kids on the West Coast weren’t using ChatGPT or Google anymore. They were using this thing called Perplexity AI. So I of course tried it out and it was just unbelievable. It’s it’s an answer machine, but the speed, but the depth of the answers and the quality and then the fact that they give you the sources if you want to go deeper. It was nothing like I’ve ever seen. If you don’t believe me, just ask Chachi, BT, Gemini and Perplexity a question and get the answer and you’ll see. You’ll see exactly what I’ve talked about. I fell so in love with it. We tried to get in on a round that we were lucky enough to be accommodated. I love the founder, Aravind Srinivas. He’s super aggressive and with his team, super innovative. But he’s also got humility. He’s everything we love and a founder. So there’s a land grab going on now in the answer machine business. It’s obviously a big task to take on Google, but if you think about it, Google has 300 billion in sales. If Perplexity even goes to 2 billion in sales, it’ll be a huge winner. Frankly, I’d say 9095% of my searches now I use Perplexity. Probably the best thing I could do for the viewers today. Unless the list and all my other stuff try this thing out, you’ll love it.