The AI Trade Enters Its 'Show Me' Era with Jeff Richards
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All right. Welcome to the Risk Reversal Podcast. I'm Dan Nathan, joined by Guy Adami. As always, we have a very special guest today. This would be Jeff Richards returning to the podcast. He is managing partner at Notable Capital out there in SF. Jeff, welcome back to the pod.

Great to be here. You know, Jeff is one of the great follows on Twitter. Yeah. Have you noticed this? He's prolific. He's prolific. Yeah. So if you're not following JR on the Twitter, you should because you put out, I mean, a lot of life stuff, a lot of market stuff. It's a good cross section of your life, Jeff. I try to keep it simple. The only danger zone I get into is when I tweet about politics or taxes and then I get attacked by all the bots.

Taxes, I mean, I think those are the hot button topics of the day, which we'll probably get into at some point in this conversation. Maybe we'll do a little policy here. But Jeff, we wanted to start out, last time you were on was February 12th. The title of the pod was AI Revolution, Winners, Losers, and Investment Opportunities. We want to do that again here. But let's start with a tweet. This was about a day ago from Jeff Richards.

The shift from we love the mag seven to we love gold in European banks is really something. Now, we're going to do plenty of stuff in the private markets, but you know where Guy and I like to start here. And by the way, Guy has been a proponent of gold and European markets. I just want to get that out of the way. What was the impetus for that tweet?

I don't know if it was you guys watching somebody on CNBC who was saying, we like gold, we like European banks. And I was like, good God, it's come to this. But yeah, but he's been saying that for at least a year, gold for three years. But, you know, Jeff, on the Risk Reversal podcast on CNBC's Fast Money, we renamed in mid-December the MAG7 to the Faithful 8. And the reason why Broadcom had just entered that trillion dollar market cap club and our view, and I'm going to say our view is

was that the fate of the market hangs in the balance with these eight stocks because of concentration. So let's start there a little bit. You've been in the Valley for a few cycles here. You started as an operator in the tech space in the 90s. You've been an investor, private. I know you do a lot of public stuff individually. Let's start with the concentration and that whole notion of we love the Mag7 to we hate the Mag7 over the last month and a half. Yeah.

I have found the concentration in the MAG7 amazing. I was at a dinner with Mark Mahaney, who I think you guys know, he comes on CNBC often. He hosted a dinner with 30 public investors a few weeks ago.

I was shocked how many of them are still concentrated in the MAG7. I mean, I always think of a fund manager's job is to go out and discover new ideas, do research on companies, find an edge that other people aren't seeing. But you look at the 13F filings, I mean, it's amazing how many of these fund managers are still heavily concentrated in the MAG7. And of course, that's had a pretty negative impact on their returns this year. I just think it's a great time. And you guys know this. I mean, I'm a hammer looking for nails, heart surgeon looking for hearts.

We love the undiscovered stories. Where's the next Salesforce? We talked about this back in February. And there are so many small cap tech names or even mid cap tech names that are going to benefit from AI. Unless you don't believe AI is real, which I did take away from my dinner, there are still folks who are skeptical about

It feels like a great time. This almost has become a stock picker's market. Instead of just betting on the layup with the MAG7, go do some work and go find some names that you can get excited about that could go up 10, 20, 30x over the next decade. Have things unearthed themselves in terms of discovery over the last couple of weeks? Because the sell-off we've seen since your last appearance has been pretty dramatic.

It's been dramatic, but okay, let's take that and then go back to a name you and I talked about Guy the last time, which is Pinterest. It's up 3.5% year to date. Not a rocket ship, but it hasn't tanked 20 or 30% like some of the other popular names have. CrowdStrike up 8%. I just think what you're finding there is smaller names and CrowdStrike is not a small company, it's a big company. People love the management team. They love their position in the market. They know that over time it's going to benefit from AI.

And so what you've seen is a little bit of people don't, they're going to sell the MAG-7 when it's down. They don't want to sell those names that they think could double or triple in the next three to five years. Here's a wonky question, and I'm not looking to tee you up here, but, you know, so many of the names that you look to traffic in find themselves in a lot of these ETFs. So whether rightly or wrongly, you know, if these are heavy Apple, heavy Microsoft ETFs,

the names, the underlying names get dragged up along the way. But the opposite happens as well. When these ETFs or these individual names get sold off, these other names, by virtue of the fact that they're there, get sold off as well. Do you go parsing through sort of the ETF world to find names that have embedded themselves in there that have been sold off indiscriminately, if that makes sense at all?

Well, I think so. One of the challenges for me is I love the name fast money, but I'm sort of the opposite. I'm slow money. I like to find things that can compound and grow over a long period of time. And, you know, I've been using the last 30, 60 days as an opportunity to nibble on some things that I like. And you guys know, I love the kind of PE alt manager sector. I've talked about that for years, the Blackstone, KKR, TPG, Blue Owl, Aries, and

those names are down big, 20%, 30%. And I think, I don't know why, but I would presume it's because people believe A, rates aren't coming down and lower rates are an advantage for them. B, we don't have a ton of liquidity in public markets and M&A like people thought we might have. And C, people are worried about their private credit business where you might have some issues in the economy. Their private credit portfolio could not look as rosy as it did 12 months ago.

But I just think over time, if you're betting on the long-term flow of assets into private markets, whereas we know we've had a relatively constrained number of public assets, but lots of private assets to go invest in, I think those guys are still really well positioned. And so just on a personal book, not what I do at Notable, I've added to some of those positions because the example I always give people is look at KKR. Last five years, it's up over 5X.

Show me a growth tech name that's over 5X that also pays a dividend, understands financial markets and can play in up and down markets. In a down market, those guys take advantage and buy assets cheap. In an up market, obviously they're generating liquidity. So that's one category. It's not tech, but on a personal level, it's a category that I really like, as you guys know. Yeah, it's interesting though, you mentioned liquidity.

Right.

to the upside and here they are they're all down 30 across the board so the idea of kind of picking a bottom i know jeff your time horizon is you know very long and if you got them down 30 you'd start dollar cost averaging because you believe that there's a double and then there's probably a double again so um i get all that let's go back to by the way mark mahaney was on the pod um last week we love mark i've known him jeff going back to like the late 90s when he was at morgan stanley and

Same for me. And he's got a son playing for UConn. Yes. So go UConn. Which is pretty cool, right? Used to be at St. Mary's. Now he's at UConn. Yeah. St. Mary's is in the big dance. You saw that. They are. Bill, did we take St. Mary's? Dark Horse favorite. Yeah, we did. Okay. So we did a little pool with our main man, Bill Hockman here.

I want to go back to the skepticism that you heard out of some of the public markets investors in AI. And it's really interesting. You know, there is a probably a massive bifurcation in your business on the VC side. It's all AI all the time. If you are not focused, if you're not a believer, you're probably a very lonely guy or gal out there on the public side, though. I think a lot of folks just said, where are we seeing the return on investment? We're seeing this massive build. And when you think about just

basically a month and a half ago when all the major hyperscalers reported earnings and meta, they were all trading at all-time highs, right? And since then, they're all down 20%. What did they see? They saw a slight deceleration in revenue growth, and they saw at least a commitment to the levels of CapEx, right? But I want to go through really quickly an article from the information. I'm sure you already read it. Why AI isn't giving Salesforce a boost. I think this came out a couple days ago. Mark Benioff last month declared 2025 as the

absolute year of AgentForce, a product that software company launched last fall to help customers automate customer service and business functions. Okay, this is really the important part in my opinion. So, all right, he said, we never have seen a product grow at these levels, especially AgentForce. Then it said, a few minutes later, CFO Amy Weaver gave a more somber view. Weaver said that she expects modest sales

of agent force over the next year, and that was the company's overall sales would rise 7% to 8%, its lowest ever growth rate. So there's a lot of that going on. There's the big thinkers and the ones who basically have to sell this vision of the future, but then it comes down to when the rubber hits the road, the CFOs have to deal with those big proclamations.

Well, I think one thing that they're perhaps not talking about, and this is something that the software industry overall is sort of grappling with, is what's the pricing model for AI? So I was joking with one of our CEOs. He was talking about a new feature they're rolling out that has AI. And he said, well, how do you think we should price it?

And I said, well, part of the challenge you have right now is it looks new and novel right now, but in 12 or 18 months, it's going to be kind of standard. Like you don't charge people to log in on the internet to your software. You're going to charge people for AI functionality 12, 18 months from now. It's just going to be built into the product. And so I think one of the challenges that the mature software companies, they have a pricing model. It's a seat-based pricing model. Well, what happens when the number of seats aren't growing? Think about Meta. Meta in the last four years has grown 60% as a business.

has lower headcount today than it did four years ago. So I think, and I've tweeted a lot about this, we have a lot of pressure on white collar hiring in America. You just look at the number of developers that have been hired into banking, financial services, tech, obviously it's flat to down.

And so if you have a seat-based software pricing model, one of the questions you're asking yourself right now is what is our pricing model gonna look like in the future if we're not attaching our software to seats? We're essentially replacing labor or creating new functionality that doesn't have a seat attached to it. And so one of the conversations we've been having in a lot of our board meetings, one example I'll give you is customer success.

So if you're a customer success or customer service software company, and you've traditionally sold into companies that have thousands or tens of thousands of customer service agents, and you know AI is going to be replacing those agents over time, the number of seats is coming down. The value they're getting for your software is the same or greater, but you can't just walk in and price it on seats. And so I think that's one of the challenges you're seeing right now. And my theory is we're going to see a little bit of a J curve. Price

pricing pressure on growth. And if you just look at the growth of software, Dan, I sent you a chart earlier, five years ago, we had lots of companies growing north of 30, 40, 50%. Today, most of the top software names are growing in the teens or low 20s. That's a big shift.

And I think one of the reasons is this shift from seat-based software to whatever the model is going to be in the future. And we're just in the early days of trying to figure that out. So you're not seeing the revenue growth yet for the public software names. We are seeing it on the private side. So one of the points that I made to this group that Mark had was, if you just take the aggregate revenue growth of the private companies that we're investing in as well as other VC firms and take out OpenAI and Anthropic and a bunch of the other big names,

It's billions and probably tens of billions of dollars of spend right now. And a lot of that is experimental spend. It's going into companies that are sitting on top of that LLM and that cloud infrastructure layer. So we don't know how durable it's going to be, but there is a lot of money flowing into those companies. And it's just going to be, it'll take, I think it'll take a little bit of time for the public companies to see it show up in their growth numbers, partially because of pricing and partially because the most innovative companies

layer has been the startup layer for the last 12 months. You know, it's interesting you mentioned growth. How important is the sort of the economic growth story in terms of like the sanctity of CapEx and all the money that these companies have said they're going to spend? But again, nothing's etched in stone. So if in fact we were to see a bit of a slowdown, is there a concern out there that, you know, the CapEx, which is X right now, could be cut by a half or a third or those types of things?

Well, you guys are probably closer to that than I am because I don't really follow the semiconductor space real closely other than obviously, you know, the event yesterday that NVIDIA had and watching a little bit of that. I think there's two things you have to think about. One is we don't see any slowdown with the cloud infrastructure players. So if I were to look at the private market, Mark asked me this question, in our portfolio, where is the spend happening with the cloud infrastructure players? And the three primary are AWS,

which is Amazon, Azure, which is Microsoft and GCP, which is Google. In our universe of private high growth startups, it's probably 70% AWS, 15 to 20% Azure and 10 to 15% GCP. I think it's a little bit different in corporate America, call it the Fortune 500, 'cause a lot of them are big Microsoft customers or in some cases, big Google customers. So you'll see more spend there. We are not seeing any degradation in spend on what I would think of as sort of like traditional cloud infrastructure.

The area that I think a lot of people are wondering about is all the spend that's going towards the LLMs. And if we do get more efficiency, right, as the GPUs get more efficient, are we going to see that spend come down?

I personally don't think that's going to be the case, but obviously that's the big question on everybody's mind. Everybody, otherwise everybody be piling into Nvidia right now, but it's clearly a question on people's mind. Well, that's a great point. And it's a good segue here because again, the information had an article this morning, top developers want Nvidia Blackwell chips, everyone else, not so much. And I thought that was really interesting because Wong had this two hour, you know, keynote that seemed like it was a bit rambly, if you will. And, you know, one of the, the,

Well, I mean, you know, I'm sure there's a lot of those folks who are particularly excited about it. But Wong's remarks on Tuesday suggest he's pulling far ahead of some customers. I think this is really important. And growing gap between what he's selling and what they're buying spells trouble. And the last point I'll just say is that NVIDIA customers that this Anissa Gardizzi spoke with said they had a hard time getting overly excited about Rubin. Guy and I have been making this point.

Okay. So it was Hopper, then Blackwell, then Rubin. And it really seemed like over the last few years as this stock started skipping higher and higher, he started, I guess, spelling out this vision more specifically and getting customers more

like kind of locked into the software platform and then telling a better story about the next iteration of hardware. And something switched, Jeff, over the last, call it, few months or so, where anything out of his mouth was worth 4% or 5% in the stock. And now the thing down 25%, it really feels like it's a different investor base, or at least those who enjoyed much of the ride over the last three years are maybe thinking a bit more critically about the stock.

Well, I think, look, I think a lot of analysts have written about this, but if you think about the way that this AI works,

sort of boom is going to roll out, you start with the base layer, which is the semiconductors and the chips. Then you move into the infrastructure layer, and then you move into the software layer. And so that was sort of my point earlier is I think we're going to see, and I hope we're going to see, some of these investors start to say, okay, maybe that shift has actually happened. I caught the semi-wave. I caught the infrastructure wave. Now I want to catch the software wave. And if you just look at some of the names that

likely benefit in that scenario, I'll give you three, Datadog, Snowflake, CrowdStrike. Datadog, great name that has been beaten down pretty heavily over the last 12, 18 months. But if you look at the sell side analyst reports from Goldman Sachs, their price target's 57% from here.

Snowflake, beaten down, new CEO, betting big on AI, hasn't quite shown up yet. Goldman Sachs price target up 46%. So I just think we're in that moment where it's a little bit of the, what is it, Missouri that has a license plate that says the show me state. We're a little bit into the show me state where people don't quite know whether they should make, they all believe these companies are going to benefit, but they don't know when. And they don't know whether now's the time to bet on that, particularly given all the uncertainty in the market with the political landscape.

But if you're in my seat and you see what we see, which is you see all this revenue traction with these private companies, you see big corporate buyers who are buying. They're not buying at the volumes that would impact an Oracle or an SAP, but they're certainly benefiting your average $50 or $100 million startup. That will eventually make its way into the data dogs and the snowflakes of the world. And then look at the deal that Google just did with Wiz for $30 billion, which

Clearly, they are saying to the market, the largest acquisition the company has ever done, cybersecurity is going to be very important in the infrastructure and the AI space to spend $30 billion with a $3 billion breakup fee, by the way. Breakup fees for public to private companies didn't even used to exist. Adobe and Figma had one. It worked out fairly well for both sides. The deal didn't get done because of regulatory issues. Figma survived as a company and had plenty of cash on its balance sheet.

That's a big breakup fee and a big commitment to Google saying, hey, cybersecurity is going to be really important in this next generation of AI and infrastructure. And that's where I think you see Palo Alto, CrowdStrike, those kinds of names who have great management teams with great products are doing well. And then we're seeing that on the private side. Wizz is not the only private

cybersecurity company that is doing very well. We have several in our portfolio. So it's interesting. You sort of beat me to the punch, but I'll sort of build upon what you just talked about, Google and Wiz. Do you see then, is that the first of what's going to be many M&A deals in this new administration? I think a lot of the rally we saw at the end of last year was built upon the notion it's going to be a much more favorable environment for M&A.

Well, I think it's a bit TBD. I think people thought we would see that. So far this year, this is really the first big deal we've seen. There have been some smaller tech-related deals that have been announced. But I recently did calls with several of the top bankers who do M&A. All of them say their book is full. There's a lot of activity going on.

but still a little bit of uncertainty at the federal government level. The mantra coming in, everybody thought was, this is going to be a big shift from the Lina Khan regime. And then what you've heard so far this year has been more, hey, we're not going to change things radically. You've got pressure on companies like Google and Apple from the EU. So it's a hard time for those big companies to make these kinds of moves. And if they are,

Hence, the breakup fee, right, was obviously not involved in the company or the negotiations, but obviously saying, hey, there's significant regulatory risk here. I'm hopeful we will see more. We've got a lot of private equity firms that have got companies that they bought years ago that they'd like to either take public or have get acquired. You've seen a few that have come out. And then, you know, I make this point a lot, but the IPOs that went out last year, you look at Reddit, you look at ServiceTitan, they've done well. So they've had a healthy...

They've had a healthy support in the market. I think the challenge still is, if I'm a fund manager, do I really want to trade out of safety at Google at 17 times forward earnings into a new name where I don't really see any kind of track record yet of establishing quarter after quarter performance? And so we as an industry have got to take some really strong companies public that outperform and start to build that track record with investors that they should make that leap.

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You know, Jeff, I want to talk about the IPO market because we've never seen, you know, the backlog like we have right now. The IPO market has been really closed for years, which really makes me think that as soon as the market, the economy is on some steadier footing, we're going to have, you know, just an onslaught. But the size in which these companies operate

are in the private markets and the multiples of sales. Now, I know, like, for instance, some of these companies, Anthropic, I mean, they're growing sales pretty aggressively, but they're going to have to do a whole heck of a lot more in a short period of time, you know, to kind of grow into some valuation that will be palatable for public investors. Right. Because we've never seen this sort of thing. And I'll just make one. So I would love to get your take on that. But this is an observation. You just said Reddit's done really well. Reddit did really well.

for about four months. And now since it's high, it's been cut in half, right? - But where is it from if you bought it at the IPO? - Right, so the IPO was, you know, $44 or something, or $36 or something like that. So yeah, it's up 150% or so, but it was up like 350%. So my only point is, and that happened in two weeks, okay? So like for instance,

That sort of volatility post IPO is not always going to be the sort of thing that is going to be that palatable, not only to some companies, but also to public market shareholders. So, you know, that's here or there. But talk to me a little bit about that backlog and the size of the companies that are likely to come first. And we know what they are. They're Stripe. They're Databricks. They're, you know, some of these other ones that have just been minted, you know, like $50 billion market caps. How are you thinking about those names?

Well, actually a really good test, and this was one of the conversations we had at the dinner I mentioned, is going to be CoreWeave. So CoreWeave is...

one of the fastest growing companies in history, but has a lot of questions around durability of the revenue and debt and relationship with Nvidia. And I think it's going to be a good test. One challenge that we have in getting new companies public, and Dan, you sort of mentioned this with volatility is, you know, in the old days, call it 10 years ago, you could go public as a two or $3 billion company, raise four or 500 million and be off to the races.

One of the challenges now with that small afloat is it can potentially create a lot of volatility in that first six months until there's more shares that come in after the lockup. And so when I was chatting with some folks from Morgan Stanley recently, they were saying, hey, look, there's a lot of great companies we'd love to take out.

but we've got to take them out with enough float that these funds can come in and not worry that they're going to get trapped in some short-term vol cycle. And that comes back to valuation for the companies and how much solution do we take in an IPO and whatnot. So I think Corwee is going to be interesting test case. It's not one of the companies that we would have all pointed to. It's not a perplexity or an open AI or an anthropic,

or a Databricks. It's got kind of a consistent, you know, predictable forward revenue stream. It's a pretty new, they just did this in the last three years, pivoted the business from a Bitcoin mining operation to a play on AI, but the revenue growth is astronomical. And so it'll be interesting to see how that's received. Yeah. And one of the concerns, we've been talking about this name for a few weeks now. I mean, there seems to be a bit of hair on it, right? When you think about just, you know, the talk of, you know, Microsoft canceling some data center leases, you know, that 62%,

of CoreWeave's revenues come from Microsoft. I mean, the list goes on and on. You mentioned the debt, you mentioned where they were from a revenue perspective, you know, just three years ago. I mean, that's absolutely insane. And then, you know, kind of this arrangement that they have for these high-end GPUs. I mean, this one seems kind of funky and it's going to be coming at like, you know, a very, very like,

you know, ridiculous valuation. And it's, you know, Morgan Stanley, JP Morgan and Goldman Sachs. I mean, this thing needs to go right, but this does not seem like the sort of thing that, you know, some of the kind of public market investors that usually make up a huge part of the book are going to be that excited about Jeff. Well, I personally, we're not involved in the company, never looked at it, never invested.

I personally hope it's not the bellwether for AI that people want to make it out to be. I actually, one of the fund managers when we were at that dinner compared it to WeWork. And if you remember, we were, oh, WeWork is a play on this and that. And at the end of the day, WeWork was a real estate arbitrage play. So I think people need to look at this for what it is. It's not a pure software company. It's not a high margin innovator. It's a company that came up with a very novel business model and took advantage of a shortage in the market for GPUs.

but I think investors will have to ask themselves, A, can I overlook the debt? Can I overlook the relationship with Nvidia? Can I overlook the customer concentration with Microsoft? Can I overlook the fact that the founder sold $500 million worth of stock recently?

and how durable is that business model going to be? And then, you know, once we get past that, there are other companies that I think will benefit big time from this trend. And we'll see those companies hopefully go public in a year or two. All right. Let's just say you were on the board of CoreWeave. You're an early investor in this thing. And the three founders came to you and said, Hey, Jeff, yeah, we just filed or we're going to be filing our S1 in a few weeks. And you've been helping me through that process. We really appreciate it. But we're going to go sell a half a billion dollars worth of stock

I mean, what would your reaction be? I mean, like, that's the thing. So if the founders who I know they have probably super voting rights and blah, blah, all that sort of crap. But if they're selling stock of the company, why would any investor buy it at a inflated price? You know what I mean? After the IPO, that makes no sense to me.

I don't have a good answer for you there. I would say, look, one trend in the market has been the prevalence of secondary liquidity. It's why Stripe has stayed private so long. It's why Databricks is staying private.

There is such a liquid market for that stock that didn't exist 10 or 15 years ago. I mean, 20 years ago, when I was a founder, if you raised your hand and said, I'd like to sell some stock, they'd walk you out the door. Nope, not doing it. Not an option. Today, I would say it's much more acceptable for companies that are raising in the single digit billions for founders to say, hey, I need to take some money off the table. It's usually 10 or 20 or $30 million. This number is obviously very high.

And I'm not, again, not close to the company. So it does seem to be a little bit exceptional to me. But I would say the secondary market, the concept that

large institutional buyers are willing to come in and buy the stock of these companies at fairly high prices is not, that's not abnormal right now. Pretty liquid. We've seen it at Figma and Canva. We've seen it at Databricks. We've seen it at Stripe. There's a very liquid market for people who are essentially buying small cap tech. They're just buying private stock that's illiquid. And we'll see if that changes over time. But right now, you

You talk to the founders and CEOs of this company, they really don't have, or these companies, they don't have a lot of incentive to go public. That market is so liquid. They can get the valuations they want. They can raise the capital that they need to, to buy out employee shares. It's really an interesting question. And of course, it all sort of dates back to Sarbanes-Oxley 16 years ago, where we made it much harder to be a public company. Not arguing whether that was a bad or a good thing, but you look at that demarcation line, it definitely has driven this trend. And then just

the massive amount of capital that has come from family offices and institutions around the world into the firms that are buying the stock. And it's a pretty liquid opportunity. Look, liquidity is there and you can avoid the scrutiny of being a publicly traded company. You sort of get the best of both worlds, I think, to your point. My last question, this is a March 11th tweet by you.

A giant market pullback in the first inning of a major technology industry shift, AI, is an incredible gift. Now, if you watch CNBC, which I'm sure you do from time to time, we talk about the same bunch of names all the time, the same industries, AI, cybersecurity, all those things. What are you looking at that you don't hear anybody talking about in terms of sectors or subsectors?

That's a great question. My point there was just more so, you know, everybody's been talking about sentiment. When did sentiment drop this significantly the last time? It was July of 22.

Turned out to be a great buying opportunity. And I have a general theory, having been investing since the mid-90s, lived through the dot-com bubble, 9-11, great financial crisis. I mean, all these cycles, what you learn is when everybody else is scared and panicked and responding to the headlines in the news, which are their job is to create fear and uncertainty and doubt, so people click and read the articles.

those are often the best times to invest if you have a long-term horizon. I personally think we're going to see a lot more volatility throughout the year, just as if the first few months of the administration or any indicator,

But over time, I don't see how, I mean, it kind of is a litmus test. Are you bullish on AI or are you not bullish on AI? If you're bullish on AI, it's going to impact S&P 500 earnings in a positive way. It's going to be deflationary for the economy. A lot of other factors involved in that. And it's going to drive growth for tech names that we all know and love. So again, if I'm thinking about where are these stocks going to be in two or three or five years, hard for me to not see it as a buying opportunity, particularly when I look at things as pretty overvalued

60 to 90 days ago, right? I wasn't buying anything in December and January. So when you think about what the market and the public markets

and obviously many of these names in the private markets that you guys have invested in early stage, but some of these ones that have gotten so big. I mean, the main story about generative AI is building out the infrastructure to train the models. And then the next stage, right, is going to be how these agents are used and how disruptive they are going to be. Like the information in our article today talking about consumer apps, how agents, you know, might really disrupt like delivery companies like DoorDash and the like. And, you know, that makes sense. But what

Where would you go the opposite way? Where do you think people aren't looking where this technology is going to be adopted, you know, in the not so distant future? And you just talked about deflation, you know, and that sort of thing. We've seen this across the Internet over the last 25 years or so. But where do you think like the best opportunities are to invest in an industry that's not exactly a tech industry, but it's going to get the benefit of this technology? Number one answer I would give you is health care.

I think this is going to be, and again, healthcare is challenging because there's so much of it that's highly regulated and been hard to crack into for tech companies. But look at the software that, you know, how's your experience when you go to the doctor or dentist? Not great, right? You know, I can't even book an appointment with my dentist online. It's crazy. I mean, this is not 1995. This is 2025. I think what you'll see is,

companies innovating in that space because the space is so massive. There's so much, I mean, it's what a third of our GDP, I think it's the largest part of GDP is healthcare and growing as people age.

There's so much opportunity to create efficiency in billing and patient care, proactive medical care, right? Today, it's very hard for my doctor to send me a text every day and say, hey, Jeff, how's your, you know, how was your workout? How's your diet? How's your cholesterol? Blah, blah, blah. An AI agent can do that easily and integrate with my Apple Watch, my Whoop, my...

or a ring, I need to obviously probably put in the data as to what I'm eating, but it can then monitor my vitals and be proactive with me. So there's so much opportunity in healthcare. I think the challenge for a lot of us is we've all been burned by healthcare markets big, ripe for technology disruption, but it's been really hard to break into. But that's the one category I'd point to and just say,

And by the way, I think it'd be great for all of us, right? If I can give you better personalized healthcare and what you really should get, rather than us all taking the same supplements and trying to eat the same foods, you should get stuff that's very customized to you. And we're seeing a bunch of

consumer-oriented startups in that space, as well as on the enterprise side, companies that are saying, hey, agents can take out a lot of the manual labor and work that gets done in a hospital today. How much time does a doctor or an admin spend filling out paperwork, trying to get insurance, billing and claims? All that can be done with agents. So that's one category that I'm super bullish on, and I hope for the economy it plays out. JR1, the eve of the NCAA tournament, the four number one seeds, Houston, Duke, Florida,

And I guess Auburn seemed to be the best teams in the country by far. Anybody getting knocked off or is this a chalk tournament? Well, my son's running our pool this year and he made everybody pay a $10 buy-in. So I've studied this a little bit and it's, I have a hard time. I've watched Duke a bunch of times. It's hard not to pick them. I mean, they look so good when Cooper flags playing, but the beauty of March Madness, we know there's going to be some great upsets. The other thing that I think people underestimate, and you guys know this from playing sports is,

They were talking about how a play in team often makes the next round. So much of it's psychological. You win a game, you're feeling good. You're you're you and your buddies are like, hey, man, we played great last night. We got to play again in three days. We're feeling good as opposed to the teams that just had a five or six day break. So I would look for teams that have been hot in their tournaments and are feeling really good about their game.

The teams that exit the tournament they were in but still get the bid, you have to wonder how much psychology is there and whether they're really feeling good about their game. Well, you just mentioned, I mean, it sounds like you're talking about North Carolina who won that play. North Carolina was a good example. They destroyed San Diego State last night. Yeah, you know, and it's interesting. They have a chip on their shoulder, too,

Because if you listen to what's going on, they shouldn't have been in the tournament. What happened to West Virginia? I think Indiana was another team that got left. I know it was West Virginia. So North Carolina is that team for sure, Jeff. Yeah. No, I love it. This is my favorite time of the year. It's so much fun. All right, my man. Well, we appreciate you being back here. We hope we'll do it again soon. Jeff Richards, managing partner, Notable Capital. Thanks for being on the pod. Thanks, guys. Great to see you.