Trump vs Powell, Solving the Debt Crisis, The $10T AGI Prize, GENIUS Act Becomes Law

XAI and Apple are natural partners. There's been a lot of news about Apple thinking about buying Perplexity or McStrawl, but that's just a bandaid. Those companies don't get Apple what they need, and Apple's had an incredible partnership for many years now with Google, that's generating tens of billions of dollars for both companies. I think there is solid industrial logic for partnership.

And to pivot to market structure really briefly, this provides the rules of the road for the exchanges, the brokers, everyone in the space. They desperately need it so that we can break down the wall between traditional financial institutions and these digital asset players. I think that's well underway. Obviously, getting a vote as strong as they did in the House is indicative of what can happen in the Senate.

In fact, the chairman of the Senate Bank Committee, Tim Scott, has said that he wants to finish with the market structure legislation by the end of September. So if all goes well, then we could be looking at a second bill signing in, say, October.

What could be bad about allowing digital dollars, which extends the dollar's dominance online, so that it basically bolsters the dollar status as the world's reserve currency. Over time, as we get challengers from BRICS, for example, this is going to make the US dollar stronger. And every time a dollar token trades somewhere in the world on a crypto wallet, there has to be a physical dollar in a US bank account invested in a US treasury. And that creates demand for our debt, which is another positive thing.

I'll make one more point before I jump off on the tether topic. The one thing that I think your viewers should know is, this year, they'll be the fourth largest purchaser of US Treasuries. I think that's something that we should really contemplate.

I was always worried about stable coins, the risk to the dollar. But I think you make a very good point that when you are the dominant currency, they entrench the dominance.

And in order to be in the US market, Tether is going to have to be 100% in treasuries, right? They're not going to be allowed to be, say, in real estate.

This is about taking America's payment system in the 21st century. This is about making our nation more competitive. This is about expanding demand for the US Treasury securities that we issue. This is about the dominance of the US dollar.

Being the low cost producer is really going to matter in AI. Because at some level, the amount of tokens you produce is intelligence because of test time compute, you know, post-training reinforcement learning. And so if you can produce those tokens at a lower cost, you'll have a big advantage.

Firing Powell, I worry that the market only went down 1%. I do think the market would go down quite a bit more if Trump did fire Powell. I think it would be a mistake. I hope he doesn't do it. And you know, there are very sound reasons for the Federal Reserve to be independent.

I think what the market is saying is it's not as much about Jerome Powell, and frankly, getting rid of a prudent individual may be more challenging than it is beneficial when the real challenges facing the United States need to be more heartily addressed.

So this is incredible progress. And I think it's worth mentioning, this model was trained on Hopper. So this model is probably about as far as you can take the last generation of Nvidia GPUs. The next models we see, you know, Grok 5, you know, O5 from OpenAI, whatever they're going to call the next Gemini. They will be trained on Blackwell. And I think that will be a really big step function.

I mean, electrical production is fundamental to AI. If we do not significantly increase kind of domestic energy production and electricity generation, you know, we're already at a disadvantage to China. And I do think we want to close that kind of electrical generation gap as quickly as we can. You know, natural gas is great. Nuclear is great. Solar is great. Batteries are great. We need it all.

There's a lot of spending in there, as we've talked about here, putting that aside, it feels like the economy is in really great shape.

I think that I wouldn't say that's a reasonable bogey. I think that might be a little aggressive. The world always, I think it's a Bill Gates quote, the world always changes less than you expect over the next one, two, three years, but way more than you expect over 10 years. Just takes time for technologies to diffuse.

This is, I think, Gavin, one of the great upshots of the AI boom is that the AI companies, whether it's Meta or Google, they're so motivated that they'll actually go and upgrade the infrastructure. They'll invest in the, you know, small modular nuclear reactors that are coming.

Yeah, the browser is part of distribution-winning championships. Apple has Safari, Google has Chrome, and if you're not going to strike a partnership with one of those distribution channels, you will eventually need to do your own browser, and you can extend that logic all the way. That's why at Google they did a browser, they did a phone.

It wasn't just big tech. Yes, Ruth Porat from Google was there. It's also small tech. There was hardware companies, there were robotics companies, but there were also these energy companies. There was nuclear, there was gas. The trade associations were there. It's construction, it's electricians, it's carpenters. And so, there was a huge diverse array of different parts of the economy that are going to experience growth from this AI boom that's taking place.

And ultimately, don't we look at the tariff situation and say, despite the shock and awe of the opening salvo, it's quite a boring position now. It just seems to be reciprocity and reasonable reciprocity at that.

I would say for everyone but China. You know, it is, and you know, we're, we've clearly reached some sort of deal with China, you know, rare earths for H20s and MI308Xs.

Jameson is back now as the US Trade Representative and I'm very optimistic that we're going to see more trade flourish. President Trump knows how to do this. I've been with him in the trade negotiations. He knows exactly how to navigate this.

But Genius is unique because it really updates the payment rails inside of our current financial system. I mean, the payment rails have been archaic, and I've likened it to the fact of the ways in which we've communicated have changed quite dramatically over the course of the last several decades. The ways in which we move money really haven't, and we have the technology there in blockchain technology. So what we're doing here is we're fixing the plumbing of our financial system

But now consumers will have the additional protection and confidence to know that all these entities have been audited, they've passed these audits, and they're regulated entities under US law. And that creates confidence for the market, and it's good for everybody. And it will spread the adoption of this stablecoin product.

At 3.3%, which is the current average rate we're paying across $36 trillion, we have a run rate interest expense. So just the money we're paying each year on the interest of the outstanding debt is $1.2 trillion a year. And if the spike's up to 5% from 3.3, we're talking about nearly $2 trillion a year in interest expense.

Now that rates have gone up and don't seem like they're you know, going down anytime soon, the deficit does matter and it really matters. And you can kind of run a couple of scenarios, but like pick your metric. If the deficit kind of continues at current levels and we were to refinance the debt at the prices that David was talking about, it's only a few years before spending on interest is significantly larger than spending on Medicare and Medicaid or Social Security or the military.

The Big Beautiful Bill is doing, it's oriented toward growth stimulation. Everything that we can do to stimulate more capital investment in the United States is embodied in the tax law as part of that bill. So with the growth coming out of the Big Beautiful Bill, and if we continue to go through the cuts with decisions, I'm very optimistic that we're going to get back on the right path.

So the focus is going to be to continue to find opportunities to basically legislate what has been found in DOJ, the other activities well beyond DOJ. Every department head, every agency is looking for ways to streamline regulations and to cut the cost and to operate more efficiently. I've got to believe there are tremendous opportunities there and many billions more dollars that will come out of the budget as a result.

And so I think it's a smart decision for America to sell this chip that gives America the advantage in AI and keeps China from developing kind of their own domestic alternatives, which could eventually kind of challenge Nvidia, AMD, you know, other kind of American AI accelerator champions globally. We don't want that to happen. So I thought it was a mistake when they banned the chips. And I'm really happy and think it's really good for America if that is being reversed.

I think there's a billion people in the developed world who could spend, let's call it a hundred a month, $1,200 a year, it doesn't take a genius to figure out this is a trillion dollars in revenue based on market cap. That's probably $10 trillion in market cap.

there was maybe three months where Trump said he did not care about the stock market. But now he's back to quoting the market at all time highs. Yes. He clearly cares and is clearly very sensitive to market feedback.