China, China, China. Breaking Down China’s Tech Surge | BG2 w/ Bill Gurley and Brad Gerstner

00:00:00Over lunch, this individual told me, youknow, every founder and every VC inChina studies the West at a nauseatinglevel. So they listen to all thepodcasts, they read everything theypossibly can, they study any speech,they look at the financials. And hesaid, "The West doesn't do that ofChina."And you know, maybe we should be maybewe should be studying the best and thebrightest over there.[Music]

00:00:37[Applause]>> Hey, Bill. Great to see you.>> Good to see you.>> Summer's summer has just blown past.It's It's almost football season.>> Yes.>> How are the Longhorns looking this year?Um, they're ranked pretty high.>> What's that mean? Come on, give me thescoop. I know. I know. You're all>> people that people that know, but theythey have the dangerous startingposition of being ranked number one inthe country.>> Oh, wow. Wow. Any big games coming up?>> They uh play the number two team in thecountry this Saturday. And>> so, we're going to find out. We're goingto find out. We're gonna find out. Oh,back to Buckeye country.>> Yeah, exactly.>> It's been really incredible. uh you knowI just I just got back to Silicon Valleyum after you know being away for a fewweeks these you know the OpenAI deal theanthropic deal I was just looking atthese I think these are bigger privateIPOs than any public IPO uh done in thelast 5 years in the tech market rightyou had Sam say the other day Sam Almansay you know two two things can besimultaneously true um one that this isthe biggest thing to ever happened intechnology But number two, uh, that inthe short run things become overheatedand people are

00:01:53can get a little bitahead of themselves. Where are you onthat? Look, there's just no denying thatthe amount of capital that is going intothese companies earlier in their lifeand the scale of hiring and theirwillingness to take on risk, which Ithink you can use cash burn as just aproxy for risk because you get furtheraway from knowing unit economics and andyou're more threatening. you know, I Ithink what those numbers areunprecedented. Like even against, youknow, the Uber Door Dash wars and allthis, they're bigger than that. And so Ithink it's part of we've talked aboutit. I think it's part of a systematictrend where investors are aware ofnetwork effects. They they've watchedcompanies that get the initialconditions right go on to really bigoutcomes and they're willing to betahead of the curve. And as the moreconfident they get over more time, themore they're willing to make that betahead of time and um and so, you know,it is what it is. We're seeing, youknow, massive numbers.>> Well, I'd say it's it's a combination oftwo things. Extraordinary scaling. We'venever seen two companies, in the case ofOpenAI, scale uh users and scale revenueas fast as they are. But definitely,

00:03:08you're absolutely right. The privatemarkets are there to meet them. Um, andwe're seeing the depth and the breadthof capital and investment in the privatemarkets, I think, unlike anything we'veever seen. But, you know, we're we'regoing to save that for>> Yeah, save it for Let's save it. I We>> We're going to save Let's save that foranother day. We're going to do somethinga little different today. Um, you know,one topic that I think um we we've hiton time and time again, but we're goingto we're really just try to dedicate theshow to it today, and that's China. Youknow, you just got back from China. It'sone of the hottest in many ways mostconsequential and also mostcontroversial debates I think in SiliconValley and in Washington. You know onthe one hand you have I think nationalsecurity economic hawks you know who whoare in this camp that we shoulddecouple. It's a little bit more coldwar 2.0 a great power struggle. This isthe mirrorshimer perspective. You know,maybe in the middle you have, you know,tech pragmatists, I guess I I might callthem, you know, like Jensen Hang or TimCook. I'd probably put myself in thiscamp who thinks we we have to compete.We have to re onshore industry. Youprobably should have some tariffs inorder to achieve that. But you youdefinitely can't decouple or ignore oror antagonize. And

00:04:23then maybe on theother end, you have kind of theglobalist. I don't know, Jeff Sachs.Jeffrey Sachs is probably in this camp.It's free trade, open science,collaboration.And you know, there's this is oftremendous consequence to issues aroundtariffs and trade, issues aroundmilitary, issues around AI. And there'sthis new book out by Dan Wang that Iwant to talk about um you know uh wherewhere he really takes on the differencesbetween the two countries. But why don'twe start with you know this trip thatyou recently took. You know, you youjust got back from China. Why did whydid you go you know and franklyespecially given all the you knowblowback you've gotten personallybenchmarks gotten uh with respect toChina maybe for having too soft of viewon China. Give me your inspiration forwanting to go and spend as much time asyou did studying China.>> Yeah. So I've I've probably been four orfive times before this trip but I hadn'tbeen since um co and I've been readingyou know about everyone that's beengoing. We had talked about ThomasFreriedman's comments um from his lasttrip and you hear about all the thingsthat are different. Um, you know,personally, my my daughter's an Asianstudies major, so she

00:05:38went on the tripwith with myself and my wife, and so,you know, with her studying that topic,this is I thought it'd be a great chancefor her to see things, too. Um, muchyounger than us, but I wanted her to goaround and the fact that she speaksMandarin and was helpful on on the tripas well. But you, you know, you justsaid something, right? you said this isprobably the most consequential, youknow, other nation when it comes tothinking about America or thinking aboutour stock markets or thinking about howtechnology companies are evolving. Andso I just wanted to learn like like likewhy wouldn't you want to know more? Idon't understand how you if it is themost consequential relationship for ourcountry, why you'd want to know less,right? And so, um, I've always enjoyedgoing over there. I've always en enjoyedlearning things that I don't know. Um,and I really wanted to see it up closeand personal. Um, one thing that wassuper helpful was Dan Wang, who you justmentioned gave me a early copy of hisbook, so I read it on the way overthere.>> Tell us who tell us a little bit who isDan Wang.>> So, um, it's a gentleman that lived overthere. He lived over there during

00:06:53COVID.um you know he's a he's a policy analystum and he recently moved back to the USum>> he's at the Hoover Institute beenstudying China for a long time looks atit through the lens of technology andinnovation>> and the book's titled breakneck and it'sreally talking about some of theaccelerationum that we've seen in in building youknow inside of China but but it it Iwould suggest the two things about thebook that are really interesting one hekind of uses Is it a mirror back on theUS? So, it's really about bothcountries. It's not just about China.Um, and then two, he's balanced like hetalks about the pros, you know, and thecons of what have happened over there.He starts with with this chapter thatwas recently republished in the Atlanticwhere he highlights that the vastmajority of the polit are formerengineers. So this is the the rulingparty within China and that the vastmajority of the people in Washington DCare former lawyers and you know the heuses that lens to say this is whythey're great at building things andmaybe why they're not so great at socialthings. I think he gives the edge tohaving the lawyers

00:08:09to protecting freespeech and personal rights. He did notenjoy the lockdown in Shanghai which wasfairly abrupt. um he's very negative onthe one child policy and for thosepeople that don't know the the Chinesegovernment's now trying to encouragepeople to have three children notsuccessfully but but that's the newprogram um so they've completely flippedfrom where they were um but but it's afascinating read it's a very personalread you can tell that you know his lifejourney his parents were born there andleft you know and went to Canada andthat's how he grew up in the west andthen he went back and so he has it's Ithink it's a really interesting lens butit's very very current. One of thethings he really dives into and this issomething that that people that I talkedto that know China have known this forsome time but I don't think the generalpeople understand this. So one of thethings that's led to the vast buildoutso we've read about high-speed trainswe've read about overnight cities we'veread about their number of companies inthe solar space and the EV space. One ofthe reasons that happens is theprovincial leaders compete with eachother. So the provinces are verycompetitive with one another.

00:09:24Not in thesame way the states are really. Um, oneof the reasons this is true is if yourun a province and do well, you putyourself in really good standings tomove up in the federal government. Butwouldn't you say that's a I mean thatseems to me like Gavin Newsome competingyou know with Dantis in Florida on youknow who is more business friendly whois tougher on immigration. It seems alittle bit the same way.>> I think it's a little bit the same waybut the difference is that becausethere's a singular government that'sgoing to make choices like like in theUS if you do well as a governor youmight get elected. But in this case,it's more like divisions of a companyand if you run one well, you might getthe CEO job and and so that competition,you know, leads to overbuild in certaincases. So there's several ghost citiesum that that are buildings that areempty, you know, where they've built toofast, are now facing problems eventhough they're the world leader in EVsand the world leader in solar panelswhere some of these companies need to gobankrupt and a province may not wantthem to because of employment issues,right? And so those are th those are

00:10:39flip, you know, two sides of a coin. Youget one benefit, you get hypercompetition. We talked about thethousand flowers bloom. So this the thefederal government publishes every fiveyears this this mandate of the thingsthese are the things that are importantand you need to go work on and then theprovinces you know go go at it like theygo right against those initiatives andthat's that's how they've got taken alead in those things we mentioned andenergy production right you wonder wetalk about all the number of nuclearplants that they have new nuclear startssolar farms wind farms>> I want to dig into thatI think there's this general view thatChina's good at building things,building iPhones, but perhaps not atinnovating, right? And then, you know,Jensen Hang reminded us recently that50% of the world's AI researchers are inChina and they're indeed innovating andnot copying. You know, on the ground,when you look at the things happening inauto, when you look at the thingshappening in AI, when you look at thatthings happening in space or energy,etc. Um, how would you compare contrastas a venture capitalist the level ofrigor and innovation and excitement,enthusiasm,

00:11:55um, and investment, I guess, going onagainst these, you know, critical futureindustries.>> Well, if you're over there, you you knowthat the bite dance founder is justremarkably unique. You know, Le Jun atXiaomi is remarkably unique. And if youspend time um studying those people, Ijust I don't know how you would possiblythink that they can't innovate. I mean,t Tik Tok was there first, right? Andthen it came here and then reals copiedTik Tok. One thing that doesn't seemlike innovation, but I was surprised byPopMart is a uh 4050 billion dollarpublic company, which is a children'stoy company that started in China and iseverywhere over there. But like just theidea that that there is no innovation.You know, one one of my favoritemeetings and I promised I would protectthe innocent. So I'm not going to surewho it was with, but over lunch thisindividual told me, you know, everyfounder and every VC in China studiesthe West at a nauseating level. So theylisten to all the podcasts, they readeverything they possibly can, they studyany speech, they look

00:13:10at the financials.And he said the West doesn't do that ofChina.And you know, maybe this goes back to mymain motivation for going over there tolearn, but that I thought that was avery provocative statement that he made,you know, and um maybe we should bemaybe we should be studying the best andthe brightest over there. Well, let'slet's dive into, you know, maybe oneindustry, I I guess, as a lens. Yeah. Iknow you spent a bunch of time uh in theauto industry. Yeah. Right. Looking atall of these new entrance and I help usunderstand the innovation that'shappening there on two dimensions. Oneon uh you know just electric vehicles.number two on you know maybe autonomyand then number three I'm just curiouslike how Tesla is able to compete soeffectively you know in a market whereyou have this hyper competition uh forelectric vehicles.>> Yeah. So I I I had a number of autoexperiences when I was over there. Firstof all I I was invited to um visit BYD.This is my they gave me a nice coat. Ium I met with Stella Lee who is theirnumber one executive I think facingoutside of China. Um she runs

00:14:25all theirEurope initiatives. For those peoplethat don't know BYD is the largest EVmanufacturer in the world at about 4million vehicles. Um they started inbatteries. They they you know theycompete in with uh Fox Con to buildmobile phones. They bought JableCircuit. You remember that old company?>> I do.>> And they make lots of things. They makebuses and subways and all kinds ofdifferent things, but they got into carsuh over I don't know about 5 to 10 yearsago. Um they have a number of models.They gave me this one. This is, youknow, a a very kind of high-end sportscar. In fact, I met a public company CEOthat was proudly showing me this was hisfavorite car that he drives around. Theymake an SUV you can drive into thewater. I don't I don't know exactly whyyou'd want to do that, but we rode itinto the water, drove around in thewater, and drove out. Um, they have carsat 10 to 15 grand price point on theentry side. They've hired a Europeandesigner, which is how they're buildingstuff like this. Um, on the higher end,um, and, um, they're very aggressivefrom a cost perspective. I think BYD

00:15:40more than anyone on the cost side. It'snot preventing them from buildinghigherend cars as well. Um, so that'sBYD. I also had a chance it to visitXiaoi. They also gave me a car. The uhthe Xiai is a super interesting story ifpeople don't know. So I I was fortunateenough to meet Lejun back in 0304. Umbut about 13 10 to 13 years ago hestarted a phone company and that's whatXiai is and that company's now third Ithink around the globe in handsets soldheavy in Europe heavy in South Americanot just China um and 3 to four yearsago I think around 2021 he decided tobuild a car and it was about the sametime Apple said they were going to builda car and and mind you this guy was backin 03 ran an e-commerce company calledJoy-Yo. Like like he's he wasn't Ithere's no reason he should be able tobuild a phone and then build a car.>> So what do you attribute that to Bill?like why you know when you see that youknow again going back to Dan Wang's bookhe's like this is an engineering culturethat has built these technologicalecosystems that gives rise to a

00:16:56highervelocity of innovation uh you know thanwe see in the United States that Danwould argue is bogged down by you knowregulatory capture and lawyers etc. Whydo you think uh you know Xiai is sosuccessful?>> And by the way let me let me just sharewith you some numbers. So, so they'remaking uh a thousand of these a day.They just came out with a kind of aCayenne>> thousand cars a day.>> Yeah. In in this in the factory that Iwent to, um it it it they're sold out.They have like a 30 to 40 week backlog.Um you have to pay five grand to get onthe waiting list. The factory, this isan interesting data point, the factorymakes a thousand cars a day with 2,000employees. Um, it was highly automated,like really highly automated. I imaginethat they plan to improve that numberover the next 5 years. Let's say theytook it to a,000 employees for athousand cars. That'd be a employee percar per day. That number is like at sixin the US. And that's super interestingfor a number of things. It's like if youwant to bring the jobs back there by thetime you get the jobs back there may notbe any jobs like like at one>> because of automation>> the entire global you know potential forcar

00:18:11manufacturing in 5 to 10 years fromnow could be like 400k total and so youknow we we need we just need to bereally thoughtful about those things butbut but back to Leune he gave a talk in2024 we're talking about maybe peopleshould be watching and learning in bothdirections that I would encourage peopleto watch. It's on YouTube. It's hisState of the Union from 2024. And hespends about an hour talking about hisapproach to building a car. And itsounded like so ridiculously I don'tlike like you ask about entrepreneurial.He he he decided that he hadn't beendriving a car for 10 years because hehad had a driver. So, he immediatelyswitched seats with his driver and thenhe um he went through the parking lot athis company and if there was ever a carhe had not driven, he'd leave a note onit and ask to borrow it and then hewould have the uh the owner of the cartell them what they liked and didn'tlike. So, he claimed he drove 170 carsthat way. Um>> and then he also like BYD, they hired aEuropean designer um that came in andhelped him out. But for an entrepreneurwho had never been in the car businessto build a

00:19:26factory in a three-yearwindow and and look, same thing wastrue. Our friend Omid built a factory inTexas, you know, you know, under 40.Like just spectacular that that theseentrepreneurs are capable of doing thesethings. But it just kind of blows mymind like when I was being driven inthis golf cart through this factory justthinking that this person wasn't in thebusiness three or four years ago. Andfor for people that don't know, I'dencourage you to go online and and so uhthe CEO of Ford Farley, he went overthere and I think had the exact sametour I did and he insisted they ship himone back to Chicago and he's beendriving it around and he's made some expretty extreme statements um afterhaving experienced John. This car sellsfor about 40k. Um but he said it's themost humbling thing I've ever seen. Andhe says even beyond that their costtheir quality of vehicles is farsuperior to what I see in the west. Weare in a global competition with Chinaand it's not just EVs. If we do not ifif we lose this we do not have a futureat Ford. you know that that's farly atFord, you know, and and I by the way, Iwould take a pause after mentioning

00:20:42thatto the people that are going to umaccuse just because I went over there tolearn accuse me of somehow being like aa an agent for the CCP. Is that alsotrue of the CEO of Ford? You know, likewhy is he saying these things? Likewe're just witnessing what's happeningon the ground. One of my observationsis, and you hear this from Elon, youhear this from Jensen Huang, you hearthis from Tim Cook, you hear it fromFarley, it's extreme respect for the forthe level of innovation, um, for thefocus, for the engineering culture thatexists in China. And that to me, one ofthe reasons I wanted to do this pod onChina is because I think it's as much areflection about what the United Statesneeds to do to re-engineer its ownsociety, right? It's not enough to saythat we want to reonshore criticalmanufacturing. It really is about, youknow, this movement around Americanexceptionalism, America builds. It'sabout making the reforms necessarywhether it's regulatory capture whetherit's the you know tort reform legalreform required to frankly allow uh uhyou know this level of innovation andrecognize that we're in this global

00:21:57competition you know and there are twoways in which you can you can approachthis bill one is we can build barrierswe can try to decouple and we canpretend the rest of the world somehowwon't buy China's goods You know, but ifyou look at it today, the US onlyrepresents about 14% of China's exports.The US only represents about 3% ofChina's GDP.>> Yep.>> Right. So, like we're just not thatimportant to China. I I don't want tounderstate like, you know, we're stillvery significant, but China has found amarket in Europe. They found a market inAfrica. They found a market in SouthAmerica, right? And it it seems to methat the harder pill for the US toswallow and this is where I think thatyou know I I I'm in the camp of of thosein the middle who say we need to engage.We need to compete. There is acompetition. We want to win thecompetition. But this is about focusingon us and winning and running a fasterrace. We have a lot of reforms. I thinka lot are occurring now. I think we'redoing the type of things that we need tobe doing um in order to get moreglobally competitive. There areindustries that are critical to our

00:23:12national security um you know thingslike rare earth magnets, things like uhyou know steel productions, things likepharmaceuticals where I think it isappropriate to have both an industrialpolicy and a tariff policy that's goingto provide the incentives to thoseindustries. Um, but it it's, you know,to me, you know, the reflection on whatI hear you saying about China when Iread Dan's book is that China is puttingthe accelerator to the floor in terms ofinnovation and it's in every singleindustry. It's powered by, you know, thethis provincial competition you talkedabout. It's powered by people who arejust, you know, naturallyentrepreneurial and hardworking. Um, andthere's no escaping that and there's noputting that genie back in the box.Would you What are your thoughts onthat?>> Yeah. No, I think it's exactly right. Imean, BYD has um a big presence inHungary and they have a fac they'rebuilding a factory in or already haveone in Mexico. And why, if you'reMexico, would you not buy the 10 to 20grand EV? Why would you buy the 50 grandone from America? It just doesn't makeany sense, right? like you're if

00:24:27for anycountry around the world and I couldreflect this on the US as well if you'renot going to buy you know domesticallyyou you should certainly buy from thelowcost producer right it goes back toto comparative advantage right if you ifyou can't produce a globally competitiveproduct and you close your import borderyour people are forced to buy a productthat that is overpriced and and and notand and so from a from a standard ofliving perspective, they're worse offthan they would be if you had opened theimport door. And so I don't you know, II'll give you another example of this.So this is the the BYD. This is theApollo um competitor to Whimo. So wewe've we've seen the Whimos aroundAustin and San Francisco. We've riddenin them. This is I've ridden in thisnow. Um, it's a little bigger, I think,a little roomier than than than theJaguar for sure. Um, it's more of anSUV. Um, but this is on the streets, youknow, and Apollo is kind of interesting.It's inside of BYU, which is a searchengine company. Um, while people aresimultaneous, while people are sayingthat that that Whimos should be worth170 billion inside of

00:25:43of Google, you canbuy shares of BYU for zero enterprisevalue. It's a 30 billion market cap, 30billion in cash on the books. Um, andfrom a global perspective, I don't knowwhy if this is 30K, why you'd want todeploy Whimos, which people say are over150K partially due to the to the MIMsolid state LAR advantage that Chinahas, which we've talked aboutpreviously. So yeah, I think rest ofworld is a really interesting thing tothink about, you know, when you comparethe two countries because I don't thinkthat I I person and I I don't have a tonof data on this, but I I personallydon't think all the other countries inthe world share the same level ofhawkishness that at least part of themembers of our national government have.And so I don't think they're going to beas afraid of their technologies.>> Let's think about this in the context ofyou know uh uh uh what you seen if youwere giving advice to Trump uh on exportcontrols for example Bill um you knowwhether it's on you know AI chips orother

00:26:58things um you know would you be uhyou know what would your advice be?Well, I mean, I think you hit on some ofit around the red tape. And, you know,there's a couple different things incertain industries where we're reallybehind. I would be very open-minded toJVS coming towards us. You know, for thepast 50 years, you know, European carmanufacturers, US car manufacturers,they opened facilities in China. Some ofthem were forced to be 49% owned, 51%owned. I'd be very open to that kind ofthing. Um there was some positive newsout this past week um following Trump'sengagement with Korea around nuclearwhich we have talked about before. Koreacan build a nuclear plant for 1/4 theprice that we can. Why don't you invitethem to come help us build a few in theUS and see what we can learn? And Iwonder if we should allow Ford. There'sgoing to be there are so many EVcompanies. I didn't even mention, youknow, NEO and Ziker and some of theseother thing. They're all innovating indifferent ways, but some of those aregoing to have financial trouble. NEO'spublic. You can see that that thestock's not doing all that well, butwould we let a Ford or a GM buy one of

00:28:13those companies, right? Maybe we should.I don't know if the China governmentwould let them. Would we let one ofthose companies open a JV with Ford orGM in the US? I think we should if we'dlearned from it. You could say the samething about solar um or any of thesetechnologies where they have a lead,solar, nuclear. So, I would beopen-minded to those types of things. UmI would be really big on trying to getregulation out of the way andrecognizing that that an autocraticcountry that has specific goals can moveso much faster um in any industry thanyou ever could in the US. um becausewe've created so many people whose jobsit are to block things. Um and we'reseeing I think we're seeing that type ofbehavior in certain states which is whyTSMC's in Arizona, which is why Tesla'sin Texas. I would give Governor Shapiroa lot of credit um for reopening ThreeMile Island and what he did with I95.like like all those things are signs ofrecognizing that we've built mud, youknow, in in our system um that preventsbuilding and how do you how do you gethow do you start to remove that and movein the opposite direction

00:29:29>> specifically uh you know thinking aboutthe tariff? So, you know, I think thatthe president uh tweeted yesterdaymorning if you know, if we don't get Iit it was appearing that we're on aglide path and making a lot of progresswith China, we may very well be. I thinkhe tweeted yesterday morning that if wedon't get rare earth magnets from China,he could raise the tariff rate to 200%.There was some talk that he was going tovisit China in the first week ofSeptember. So, that's, you know, rightaround the corner. Um, I said on acouple pods ago, I thought that, youknow, the way to understand uh thispresident is that he's a self-describeddeal junkie. He's a pragmatist. He's notan ideologue. It seems to me that whenhe's talking with Jensen Wang andothers, he falls in that kind ofpragmatic centrist category. Um, hecertainly wants to rebuild stuff in theUnited States, but at the same time, itappears to me he wants to get a big bigdeal done on China. Where do you comedown? Again, if you were adviser on thetariff side of things, Bill, um do youthink he's going to get a big deal donewith China? Do you think that's theright thing uh to do? And how do youthink that influences uh some of thebuilding that you're talking about?Okay, th this is I I

00:30:44have zero insightlike I didn't I I didn't I didn't meetwith anyone in the in the CCP or thegovernment so I have no idea what whattheir mindset I this is pure speculationon my my point my part. Um, you alreadybrought up the fact that that we're amuch smaller percentage of their exportsthan people realize and people thinkabout. And as a result, you know, Ithink that they're going to be China isgoing to be far more um biased by whatthey view as as fair and and face savingthan they are necessarily like numeric.And so I think if we if someone were toapproach them in a pragmatic way, Ithink a pragmatic deal could easily getdone. I you know, if they are engineers,as Dan Wang said, I it's not like, youknow, they they wouldn't accept apragmatic outcome. I think they would,but if we um if we're intent on beingderogatoryin our language and and by the way,that's the thing that I just reallydon't understand um that you see inWashington, you see it on that selectcommittee of the CCP

00:32:00and you see it fromsome of the the the people in SiliconValley. I just don't understand thevalue of being uh belligerent and butbut penny people clearly are. I mean,they have four times the number ofcitizens on this earth than we do. Andum none everybody's, you know, countryof birth is something that happens tothem outside of their control. So I Ijust don't know why vilifying uh abillion people is a good idea. Um so Ithink it's possible. I think there's a Ithink they would do a deal. Um, and Ijust don't know if uh if we get caughtup in a silly um tit fortat verbal warwhat the benefit of that is and anythinglike that. And this is one of the pointsSachs makes um Jeffrey Sachs not Davidyou you you might provoke World War II.So what what do you what do you what'show do you put that into your MPVcalculation? Is it fair to say that, youknow, I think if you look at tariffs,um, heading into this year, they'vebasically doubled on China, but if weput tariffs on, you know, particularindustries in order to incent, uh,building and industries in

00:33:15the UnitedStates, imagine it was a deal a bit likeJapan, Bill, where we also, you know,cut a deal with the Chinese that theyhad a trillion dollars of investment theway we have with other companies that gointo to the US into some of these uh youknow industries and that we perhaps getsome reciprocity and reduction ofbarriers to some Chinese goods into intoChina where how would you handicap that?Did you get any sense um uh or or or youknow do you get any sense from the uhthe stuff you read in the United Statesas to the the probability of that? Ithink it's one of the biggest influencesas we look at growth in the back half ofthis year, as we look at marketsentiment in the back half of this year.Just curious where you stand on that.>> Ironically, one of the things that Imean, like I said, I met with I met withcompanies and founders and and anda few academicians, but I did I and somejournalists, but I didn't meet with withthe government. But in general, there'sjust not any hostility from their side,from that group of people that I metwith. In fact, most of those um most ofthose people look up to the US foundersthat have done great things, the Jobsand the Elons, and most of them aspireto compete globally

00:34:30the same way afounder in the US would like. And sothey would like to see all this umrhetoric die down and they would like tohave the opportunity to come to the USmarket. They'd like the opportunity tocompete in Europe and South America.many are Xiai and BYD already are and soI think like I said I think there's apragmatic deal to do um to the extentand and if if that um led to the typesof programs that I just talked aboutthis kind of JV thing where there's amarket they're a leader in and we youknow have that company come to the USand help us understand um how to competein some of these technologies and get tolower price points I think that'd befantastic. Do you feel like over thelast 20 years, who do you think's gottenthe best out of the relationship, Bill?>> You know, I haven't read this uh AppleChina book. Um it's it a lot of peoplehave been talking about it and I and Iaim to. Um it itI think the problem with looking at itthat way is you know you and I havetalked about this finite versus infinitegame is you know where are we in thetime of the planet and what do you thinkthe planet's going to look like

00:35:46you know15 20 30 years from now I mean I thinkit'd be very easy to say you know usingyour framing to say the US tookadvantage of Europe post World War IIand a lot of the manufacturing thatexisted prior to World War II shifted toAmerica. Um, and so you could then withthat same frame say, yeah, China, youknow, grew on the back of America andand and you know, from from that time,but I kind of look at it another way,which is there have been differentperiods where these different countrieshave industrialized. You know, we were ahuge beneficiary post World War IIbecause most of Asia and Europe had beenblown up and there was no productioncapability whatsoever. And a lot of thekind of glory day mindset that we haveabout what life and generational changeshould be like in the US come from thattime. Um, which is a bit unfair I thinkfrom a global perspective. But there's aton of hardworking people over there.you know, Deng Xiaoping broughtcapitalism underneath the uh the Chinesegovernment and led to the biggest, youknow, umincrease in standard of living of any,it's like 500 million people came out ofpoverty

00:37:01as a result of that. And youknow, when people say, "Oh, we shouldhave never let the jobs go over there."I I don't think they really want to say,"Well, we shouldn't have let 500 millionpeople out of poverty." uh you know it'sthe same people that that uh want totalk about aid in Africa and whatnot. Soa lot of people benefited in China. Umbut they're also hardworking people andand and we we talk a lot aboutmeritocracies, right? And some of thesame people that talk aboutmeritocracies are anti-China. And sothat that's a hard thing to squarebecause if someone's willing to worktwice as hard, you know, as you and youknow, willing to study harder and andall that kind of stuff, are they do theynot deserve a chance at a life like youhave? I think the bigger complaint isthat um we were naive in our tradepolicy and therefore we allowed hugeadvantages to flow to other areas andyou know by the way as Dan says in hisbook at the same time we were actuallymoving to more of a regulatory state inthe United States. So you know like ourcompanies were getting less competitiveat the same

00:38:16time we were helping theircompanies get more competitive and therewas a lot of collateral damage in theUnited States during that period of timeand I think right now people are sayingokay we're moving into this age of AIbut we have to get back to drivingreform in the United States that levelsthat playing field a bit. Um and so youknow you can't you can't undo the past.Um but I do think there's a recognitionthat um you know we need to do thethings in order to incentivize USindustry to compete more effectively ina lot of these different categories. UmI think it is going I think it is goingto be tricky though. You know, if yousay, you know, you've got a hundredcompetitors in the EV industry in China,they're all willing to work on razorthin margins and they're willing to sellcars into Europe at $20,000 or $25,000.Today, as Farley said, there is not a USmanufacturer sons perhaps Tesla thatcomes anywhere close to being able tocompete in that way on a global basis.>> Correct. One thing I've been studying abit is I I do think that the Chinesegovernment's more has more scrutinous ofmonopolies.

00:39:31You know, I don't think thatthey I think they would consider it anegative if there were seven companiesworth $3 trillion or whatever. Like Idon't think they care about market cap.I think they care more about employmentand global competitiveness, which wouldcause you to support low margincompanies. Um, and and you know, theythey get to choose to make that choice.I'm not judging it, but it would resultin this outcome. You know, there's inaddition to the Farley quote, theMercedes CEO said, "We need a realitycheck." Um, when he was talking aboutChinese EVs and then Stalantis, I guessis the new name, Stalantis,>> who who rolled up a bunch of other carcompanies. They said Chinese EVs arequote possibly the biggest risk facinghis car maker and Tesla. Um and uh hecriticized this is Carlos Tvarez. Hepublicly criticized EU tariffs onChinese electric vehicles calling them amajor trap for automakers. And this isthis is you know you talk about whatpolicy would fix things. I'll tell youwhat policy will make things worse. youknow, you start protecting US industriesby putting export tariffs on the mostcompetitive products around the world,which I

00:40:46talked about earlier. Now, yourconsumers don't have access to thoseprice points. And so, you're buyinginferior goods at inflated prices, andthat's going to lead to inflation andprosperity and standard of living livinglevels dropping in the US. So, there's alot of variables. I I would say that'sgenerally true. I think if there's amoment, you know, if there was anational strategy to improvecompetitiveness in an industry that hadbeen, you know, um, uh, uh, let's justsay had an unfair, uh, playing field fora period of time. Like I could see anational strategy, for example, wetalked about pharmaceuticalmanufacturing, we talked about chipmanufacturing, we talked about rareearths, where you would say, okay, we'regoing to actually impose a tariffbecause these other goods are floodingand it deprivives us of the ability tobuild our own domestic industry. But Ithink we have to be very careful whenyou do that, Bill. To your point, weknow that unfettered competition willlead to uh, you know, is going to leadto much better products, much lowerprices. And when you start protectingthese industries, what I worry about isyou protect the regulatory grift and thethe the the overly lawyering that Dantalks about

00:42:02in his book, right? We gotto face up to this fact that we have toreform some of these uh, you know, basicthings in the United States. And that'swhy you see companies like Tesla movingto Texas where those reforms are movingforward. And I think you know I think weare making progress on that. But I youknow I think you there is a rationaleuh for those critical nationalindustries. But I generally agree withyou that if we move to high levels ofprotection because we simply can'tcompete because it takes you know us uhyou know 10 people uh in an auto plantto do what they do with one person in anauto plant. I think that'sunsustainable.>> You and I think we need to be carefulwith the rhetoric we throw around. So SoI'll give you an example. So um if youread what comes out of the biggesttalks, they say, "Well, everyone inChina just steals things and thegovernment subsidizes everything." Sowhen I I brought that up with I broughtup the subsidization with Stella Lee atBYD and she said she said, "If I'mgetting all this government subsidymoney, can you please find it and showit to me? We're we're a public company.come show me the money I'm getting fromthe government. She's just say I'mgetting nothing. And um and and then youknow, you look at the US like we givecompanies

00:43:17subsidies all the time tobuild factories. We've had EV creditsfor the past 10 years both at a stateand a federal level. Um Intel's gettingmoney from the US government. like Idon't understand where we're say likelike it's very unclear to me like whatwe're pointing at and accusing and whyit doesn't isn't the same thing here.And then lastly, you know, Elon'spublished all the Tesla patents. Okay.So, there's free IP for Ford and GM. AndI would ask you with that free IP, if wegave Ford and GM subsidies, do you thinkthey'd immediately be competitive withChina?>> No, sir. Okay. And if I ask a hundredsmart investors that question, whatwould they say?>> I think they would agree with me.>> Yeah. So, so, so, so the thing we'reaccusing them of being the reasonthey're succeeding, if you flipped andgave that to the US companies, none ofus have confidence that would work. So,that's what I'm saying. You just got totry and get as much information as youcan, learn as much as you can. Um, sothat you I I just want people to have apragmatic view and an accurate view asthey make decisions. I I did a deep diveon on your favorite product chat GBT

00:44:32$300 version deep research and on the 24members of the select committee for theCCP and I think all but four have neverbeen to China.>> Um, right. And the ones that went it wasseven years ago. I'd just encourage themto go visit if they're going to sitthere and have um such strong opinions.It'd be good if they were educated. Iwouldn't want if you were puttingtogether a committee inside of yourcorporation um that's going to be incharge of something, wouldn't you wantthe most educated people on thatcommittee?>> I can already hear the criticism thatOh, yeah. Um, you know, you know, ofcourse people would say, well, we don'texpect the CEO of BYD to tell you thetruth necessarily about governmentsubsidies or or or things like this. Um,but here's the one thing I want to getacross in, you know, kind of thispragmatist camp. We do have to beself-reflective,right? I mean, if we have this if wehave this view that the only reasonChina's competitive or winning isbecause they're they're stealing orthey're subsidized. I think what thatview does is it allows us to deludeourselves into believing we don't needto get better ourselves.>> Yeah. Like it's

00:45:48like if you're playing acompetition and you know your your kidsout there playing in a football game ora swimming race and they lose the raceand they come back to you and they saywell the only reason that person won wasyou know they cheated. You know likeyour advice I think is no you've got toget better yourself. We've got to getbetter. How can we get better? And Ithink that's why cultivating thisbalanced and realistic view of China,what's actually happening on the ground,how hard right, folks are working, whatthe level of innovation is, the factthat the United States is is is adiminishing part of their trade, oftheir GDP, etc. I think that shouldcause us to look a little bit inwardabout how the hell do we accelerate? Howdo we build more? How do we invest more?How do we, you know, get more globallycompetitive? Why does it cost us four tofive times to build a fision reactor inthis country? Why are we building nonuclear reactors in this country? And sothe good news is this. I feel likethere's a lot of momentum under thisadministration that was building beforethis administration around investing inAmerica, getting more globallycompetitive, right? A lot of people wantto build things here again, you know,and and you got you have somebody likeJensen

00:47:03Huang who says both can be true.We need to sell H20s and B30s intoChina. We need to stay relevant in theirecosystem, but at the same time, we needto build plants in Arizona. We need torehabilitate and invest aggressively inour own domestic chip program. Thosethings can be simultaneously true. Um,and it it it's interesting that all ofthose CEOs who spend the most timecompeting in China, you know, they allfall in that pragmatist realist camp. Y>> um you know in the center about you knowthe United States needs to get seriousabout the work that it needs to do if itwants to remain globally competitive.>> With that said, Bill, can we shift for asecond? I want to I want to, you know,look at this through the lens of kind ofjust what's going on in AI, you know, umI know you spent a bunch of time overthere looking at the key players on themodel side, on the, you know, thinkingabout the chip side, etc. Um so maybejust round out that other conversationand then shift there.>> Yeah. So so um one thing one thing tonote that um that isn't in the Dan Wingbook but I I think that we can inferfrom it the government every 5 yearspublishes this five-year plan. Um thelast

00:48:18one was the 14th and I think thenext one will be coming out soon. Iwould encourage everyone to read thatbecause that's where they tell theprovinces what's important to work onand that historically has led to theseareas where they're investing heavilyand they might make a mistake in whatthey say to focus on but when they'vegotten it right it's led to a lot ofglobal competitiveness. So I would watchthat but in the in the last one in the14th they literally talked about opensource. Um, and so, you know, I I'll puta link in I found a document that coversall the history of Chinese open source,but it goes back 20 years. This isn't anovernight thing. Um, and our governmentrecently said they were pro open sourcein this new AI executive order, but butbut this was kind of pushed out to theprovinces. And so, two two things Iwould say about the AI market there.First of all, no one's particularlyconcerned about there being a amonopolist because there's so many openmodels. So there's in general, I thinkfrom the entrepreneurs perspective, um amore relaxed, you know, opinion becausethey can work on products and they cantake in all these different models. Ithink I think Deep Seek has the

00:49:33mostkind of intellectual brand because ofhow that arrived and and and almost thethe the national pride that came alongwith it. Um Quinn um is a reallyimportant player mainly because Alibabaleads in the cloud market over there.They're about as you you may you andyour team may know more of these statsthan me Brad but I think they're like a70% player in the cloud market and sothat just gives them a natural place todeliver models from that makes themimportant and then on the consumer sideyou know bite dance seems to be thecompany to watch on anything consumerand they already have an app if someonesaid whose app is closest to open ais inChina it's already an app from bitedance um that's out there people on thewatch list. People are very curious if10 cent's going to do something. Youknow, obviously they we chat stillextremely um important in China and sothat's a great asset if they were tobring something but they haven't beenparticularly aggressive and then Xiaomibecause of Le June everybody wonderswhat he might do and you know owning thephone and that big a market share mightgive you some advantages and we'vetalked about that with the US players.So that's kind of that's what I wouldsay is the state

00:50:48of affairs over thereon when it comes to AI>> on the model layer. Um is do you thinkthere's an acknowledgment or a belief uhthat they're basically they have thetools they have the chips you know withHuawei etc to be competitive? Like isthere a sense in China that you knowQuen Code is going to be competitivewith Claude Code? Um, you know, we knowthey're all open source. Do you thinkthere is a sense that they all stay atthe frontier?>> Like I had that sense before I went justbecause of the number of competitiveopen source models and the way they cantrade train each other. Did you justhave a much more natural environment tohave this kind of hyper competition thatwe talked about in EVs or solar? Likehaving that many open source providersgives you that I would say even maybemore because of the way the models canhelp one another. At least in the EVcase like you can't take someone else'sEV and make yours better, but here youcan.>> Can we talk about that? Ju just open fora second. Let me double click on this.you know, obviously we saw o open AAIopen source, you know, uh a model a fewweeks back. Now we have comments thisweek out of Elon. Uh

00:52:03they're they'regetting back to more aggressively opensourcing. Um, you've obviously got Metaalready, uh, uh, you know, with Llamaout there on the open source front. AndI saw you had a tweet yesterday, maybe,Bill, just on you were surprised thatGoogle had not taken a more aggressiveposition with respect to open sourcingGemini. Um, do you think they will? Whydo you think they haven't? And why doyou think it would be the right thingfor them to do that?>> Well, I I had some replies to that tweetto get into this, but this goes back towhere you started the podcast. I don'tthink public companies understand or Idon't think they've internalizedum and and really come to terms with thefact that the private markets arewilling to bet so aggressively on thesenew players and I you know we're talkingabout AI today but this could be true ofany new disruption in the future. Whenwhen I was going through the the Uberlift wars and you know we'd be in boardmeetings and look at these burn ratesand all this money we're spending. Youtalk about whether or not to raiseanother round and certainly thoughtabout doing what Sam did and trying totalk capital out of the market whichnever seems to work. Um, but you getfrustrated with that game and you wantto, you know, but but you're dealing

00:53:18with business decisions that you wouldnever see in another industry. And sogetting back to the question you asked,you know, I just don't know like ifeverything's at stake for Google, shouldthey be willing to lose five or 10billion dollars? Because the startupthat's attacking their space is willingto lose that amount of money. And Ithink it's it's it's an ironic situationwe're in where the private markets andthe startups are willing to be moreaggressive perhaps and more risk-seekingthan the public incumbents are. And Ithink, you know,our friend Rich Barton took a lot ofheat at Zillow when he when he chasedOpen Door, but he was faced with asituation where a private company wasclaiming it was going to out innovatehim and disrupt his game and and some ofWall Street had come to believe that.And so he engaged and he played thatgame on the field. Now, that eventuallyturned out to not be true. Um and andmaybe if he hadn't engaged competitivelywith Open Door, maybe they wouldn't havehave kind of tripped and fallen. But butit was probably the right thing to do.And I don't think a lot of publiccompanies think that way. Now Googlehistorically when it came to AWS, opensourced Kubernetes

00:54:34and went after them.When it came to Apple, they open sourcedAndroid. And certainly some of theirtheir lower models are uh open sourcedand competitive on open router, butmaybe they should be more aggressiveeven still because of what's at stake.That was that was my point.>> Okay, shifting back real quick and youknow we'll we'll round up here on China.Um you know the VC market in China, wejust rewind the clock. You know, notthat long ago, Bill. Um and you knowthere was a lot of US enthusiasm. Therewere a lot of US firms investingdirectly in China. Um right from SEOA toGGV. A lot of those firms either shutdown or spun off their operations uh youknow in China. Benchmark has taken a lotof you know heat for doing an investmentmanis that you know I've I I've readbenchmark explained really isn't evenyou know based in China. what do yousee, you know, when you were there, doyou see a lot of US investors activelyinvesting on the venture side in China?And then what is the Chinese ventureecosystem look like?>> So, a couple different things. So, firstof all, um there's a real lack ofwesterners. For all my trips, this wasthe the fewest westerners

00:55:49that I've everseen. And the high-end hotels and thehigh-end restaurants were fairly empty.Um and I think that it just has to dowith the thawing of the relationship. umthat's caused less travel fromWesterners. Um the VC market um is in abit of a lull because when when thesepolicies all changed and when you knowthe Jack Maw thing happened, when DD gotpulled back from the US markets, whenthe for-profit education companies gottaken out and when uh you know WeChatwent I mean 10-centent went flat for acouple years because of games reforms.All those things um took a lot of airout of the system and caused a lot ofpeople to reconsider. And then you alsohad and I don't even know if this wasmore led by the US government or theChina government. You had the splittingof the venture capital firms. Sequoiasplit in half. GGV split in half and andso there are much fewer western dollarsavailable to invest in China. And so youknow there are a few firms that havestayed. you know, Neil Shin at Hong Seanhad raised a ton of money right beforeall this happened. He's very active, hasa huge staff of people. um Anna Fang andand Zen

00:57:04Fund which is a a angel groupare very active and IDG is highlypresent and has been active but that'sonly three firms you know and comparedto where things were six years ago whenevery one of our um competitors in theventure industry were making an annualtrip it's it's kind of night and day umand then there's not that many um R&Bdollars available to the venture market.A lot of the you don't have thefoundations in and university endowmentsthat you do here and the billionaires umthat have made wealth typically arelooking to diversify offshore and so youjust don't have a lot of R&B dollarsseeking a home and now you have theprovinces entering the investment spacewhich is an uncomfortable reality forsome of the VCs. They're ask I hearthey're asking for terms that you and Iwould consider um non-starters,you know. Um and so that's it's all alittle bit messy. Um it's it's funnybecause it's simultaneously with some ofthese markets, EVs, uh autonomous, uhrobotics where they're where the countryis doing extremely well. So, I foundthose things

00:58:20off a little bit and it'svery everyone's very aware that if thegovernment decidesum your company is doing somethingthat's not in the best interest of theuh citizenry that that's going to getcorrected. And so there's a phrase, Idon't know if it was in Dan's book or Iread somewhere else called don't be thetallest tree.>> That's a problem for you.>> Yeah, exactly.Um yeah is in in that regard do youthink you know that's what I was I waswondering you know there seems to be aton of entrepreneurial activity despitethe fact that you know VCs haveretreated that you have companies thatare not going public and have been shutdown you have entrepreneurs that havegone missing it doesn't really seem tohave diminished you you know theactivity around uh you know around AIhigh as we were talking about clearly>> or or startups or entrepreneurism andand in fact a lot of the locals heavilydispute that Financial Times graph thatwas going around about the number ofstartups. They said it just mismeasuredthe whole thing and so no I I don'tsense that there's any lack ofenthusiasm from entrepreneurs and townslike Shenzhen

00:59:36um where where DJI and BYDand Huawei are all located. I mean thattown is a new young 20 million peoplehighly energetic you know town with lotsof stuff happening you know lots ofstuff>> you said something to me um well beforebefore we wrapped is there anything elseanything else that we we didn't coverthat you want to you want to hit on>> there's two there's two things I wouldhit on you know you talked aboutinnovation one thing one thing that thatyou notice very quickly as a westerneris no one takes credit cards. They usedto like the last time I went, but it'salmost 100% uh WeChat Pay and Alip Pay.And if you can't get those to work onyour phone, you're screwed, man. Youcan't pay for anything. Um>> what's a what's what's the government'sposition on crypto?>> I don't know the answer to thatquestion. Okay.>> I don't. But but because they've beenusing these apps for so long,>> um you've started to see incrementalinnovation around that. So, at mostrestaurants you go to, not the veryhigh-end ones, there's a QR code on yourtable. That QR code not only representsthe restaurant, but it represents thetable. And you can order

01:00:51from that, youcan pay from that. Like, like, so if youare done eating and want to pay andleave, you just scan and pay and go. Youwalk right out. And um, you know, wewe're far away from that in the US, thatamount of of automation around payment.Um, and it's just interesting. and andthat goes from, you know, the high-endhotel and restaurant will take WeChatpay and the street vendor will take it,right? It's it's it's universal. So,that's one thing. The the other thingthat I would just mention, um, veryrecently, China announced somethingcalled the K visa. And one of the um oneof the things that's happened recentlybecause of I'd say an increased umagitation between the two countries isthere have been a number of very recentpolicies in America that are impactingskilled immigration especially at theuniversity level. And I did hear storiesover there of groups of 50 or 100 PhDstudents who had been admitted into auniversity and were now being told theycan't attend. And you and I and everyonehave talked about skilled immigrationand how that's been kept flat in the US.Um and

01:02:06now you know at least with regardto China, we're starting to put upblockers. And on top of that, you'veseen these other charts where like 50%of the AI researchers in America areChinese. And so that that's somethingthat's super interesting to watch. Andthis K visa thing, which they've neverdone before, says if you are studying umtechnology, you know, I don't know theexact rules, you don't even have to havea job. So this isn't like a in the USyou need a you're welcome to come.They're going to give you a visa. So,China's basically inviting everyone tocome to their university systems fromaround the globe. I don't know howsuccessful they'll be. I don't know ifEuropeans will go there. Um, but it's aninterestingthing to see.>> Again, it's just a reminder to me like II continue to think that uh the US is inan incredible position on a globalbasis, an incredible position visa vChina, but decisions matter. And, youknow, we talked about stapling a greencard to every, you know, uh, everydiploma as, uh, you know, the thepresident did as part of the the the thepresidential race. Um, and certainly Ithink there's ample

01:03:21opportunity, uh, forupside to accelerate, to attract, tobuild in the US. And I hope that one ofthe takeaways of this conversation, themany conversations we ought to have, andit's why I think being overly dogmaticleads us astray, is we got to reflect onthe things that we can be doing betterto run a faster race ourselves, right?And I've heard you say this before, youknow, the old quote from the Godfather,never hate your enemy enemies. You know,it clouds it affects your judgment. Yep.And I think there's a lot of that goingon in Silicon Valley and other placesthat um you know we're going to be a lotbetter off if we're very pragmatic aboutuh there's no slowing down in China.They're going to be there in AI. They'regoing to build chips at Huawei. They'regoing to build models at Deepseek. Andthe the way to beat them is not to youyou know try to cut them off at theknees. We don't need to make it easy onthem. But the United States needs toaccelerate our race. And I think by ifif we focus too much on how do we slowdown China, we take the eye off the ballon how to accelerate our own race. Soit's fun spending one of these justdigging deep on a on a particular topic.It sounds like an incredible trip.>> Yeah. And and I would just echo what yousaid

01:04:36like like on especially just onlearning like my my main point to anyonethat's interested in this topic would bejust make sure you have the exact rightinformation as you then go to makedecisions especially around policy. Umand you know talk read read what theseuh globalcar CEOs are telling you. They've beenover there. They're seeing it with theirown eyes. they they don't they don'thave a reason to be as candid as they'rebeing necessarily, but they are. Um, andthen read Dan Wang's book. I think it'sfabulous. Like Tyler Cowan said it mightbe one it might be the best book of theyear. It's very well written and and ajoy to read and I would uh encourageeveryone to go pick it up. It's calledBreakneck. I think it's out now today.No, you literally can go on chat GBT andjust ask it, you know, uh what yourfavorite CEO, you know, what's JensenWang think about, uh the level ofcompetition in China, what's Tim Cookthink, what's Elon Musk think. Um thereality is the people who spend the mostchi time on the ground in China have themost respect for, you know, the innateuh you know, capabilities and ongoingcompetition that we're going to see with

01:05:51China. And you know and and I thoughtthat Dan had a really balanced view atthe end which is you know we shouldn'tgo out of our way to make it really easyon China but at the same time we got toengage. We got to be you know pragmatic.We can't stick our head in the sand andwe have to know that we got to reformourselves. We got to run a faster raceourselves. Bill, it's great seeing you.I'm glad we're kind of getting back inthe swing of things and uh look forwardto uh continuing the conversation.[Music]

01:06:28As a reminder to everybody, just ouropinions, not investment advice.