Transcription
Let's look in the Financial Times. There is an article by Lucia, who said it's not true. She went back and examined the numbers. She went back and examined the numbers again. It wasn't as bad as that back then. Now, don't think that it's better now, because there are these three things. Max 7, its proportion. I also went back and looked at the numbers. The proportion of Max 7 is unbelievably huge, frighteningly so, not just unbelievably, frighteningly so. Max 7 now...
Yes. The value of Max 7's revenue is calculated at about 7.6%, 6% of American GDP.
This time, do you think it's different, AI versus .com? People try to separate them, saying that one isn't real, but this time it's real. It truly changes the world. Do you see it differently, from the perspective of an economist looking at the output for the economy?
This is like common wisdom, isn't it? It's like everyone's shared understanding. Back then, we were so foolish, calculating all sorts of things. And then we said, "No one has earnings." We said that.
If you are interested, please look in the Financial Times. There is an article by Lucia. She said it's not true. She went back and examined the numbers. She went back and examined the numbers again. It wasn't that bad back then.
It wasn't that bad. Let me tell you a little bit because this person is someone I know personally. Before, when I worked at Patra, this person was like the CIO of Morgan Stanley Asset Management. I met him often, and I knew he was truly knowledgeable because he was the one managing the Morgan Family's funds. Now, he is the Chairman of the Rocky Feller Foundation, I believe. He said that what you think about back then, that there were no profits, he said that's not true. Go back and look at the numbers carefully. You will see that it's not like that. You will see that it's not. During that period, he went back and looked at the numbers for listed corporate earnings from 1995-99. Corporate earnings growth averaged 11%.
Yes. During the period 2015, it rose to 15%, which is higher, but 11% is not bad. 11% is not bad. And he said the tech sector... *[clears throat]* ...of that era, of the bubble era, 1995-99, the average was 20% growth.
Yes. 20% in the late 90s. Cisco, Intel, Microsoft, Qualcomm, Oracle, during that period. Those companies, which still exist, had earnings of about 30-something percent as well. It's not bad. Max 7, Nvidia, is high, it's true, but Apple was only 17% in the later period. So, on average, it's not that different. Don't say it's different. That's the first point. The second point is that the market looks good today, the market looks good today because there is the private market.
Mmm. This private market has many companies that are self-sustaining outside the market, like now, right?
Yes. Sustaining themselves outside the market. Before, there wasn't such a large market. Notice that SpaceX is still losing money, right? SpaceX is still losing money. But when it starts to look good, they go IPO. On average, companies in the market today are doing better than last time, because last time there wasn't this private market that sustained companies when they were losing money until they started to look good and then entered the market. This is his second argument. The third point, which is very interesting, is that he refers to an analysis. It's called "Financialization: How Fiscal Policy Has Inflated Profits and Equity Valuation." This is research published in the Journal of Economic Literature. Those who are not economists might not know that the Journal of Economic Literature is not just any ordinary journal. It's good, and only occasionally does it have analyses related to financial markets. But it's interesting that this article, dated November 2025...
It concludes that the increased profits of American companies in the recent period have grown due to the large budget deficits of the American government, as money flowed into companies, increasing American corporate profits. They have figures to show, data to show. Anyone who looks will see. For example, they estimate that during the period around 1996-2001, the 5-year period of the dot-com bubble, the American government's budget deficit, which was small then, contributed 25% to American companies' profits. But today, their figures for 2020-2024 show that the American government has a large budget deficit. They calculate that 55% of American corporate profits come from the American government's budget deficit. So, what does that mean? It means that whenever the American government has to return to fiscal discipline and reduce its budget deficit, watch corporate profits fall. Lucia, right? So, about three points. Don't think it's better than dot-com now, because there are these three things.
Mmm, yes. It's just that this portion might be larger than the .com portion, right? The money that flows in.
It's immensely larger. Because now, Max 7, its proportion. I also went back and looked at the numbers. The proportion of Max 7 is unbelievably huge, frighteningly so, not just unbelievably, frighteningly so. Max 7 now...
Yes. The value of Max 7's revenue is calculated at about 7.6%, 6% of American GDP. That's a lot.
And it could go up to about 10-12% if what we forecast happens. If it truly reaches that point, within a few years, say 3-4 years from now, that would be enormous.
It has been this high before, with American oil companies like XOM, Shell, BP, Chevron, ConocoPhillips, etc. They used to be this high. But those companies are oil companies that buy and sell. So, Gross Revenue is high because costs are also high. Therefore, the margin is low. The margin is only a few percent. But Max 7 has a very high margin. So, there is a real risk that these companies will become even bigger. And in the past in America, if any company became too big, they were ordered to split up the company because they didn't want any company to be too big. So, that's also a risk for Max 7, that once they reach a certain size, they will be regulated.
Yes. To prevent them from becoming too dominant.
Professor, regarding this point, I'd like to ask you for knowledge. Because we see even the stock market in South Korea, for example, it dropped over 4% today. It's because it went up before, and there were stocks like Samsung and SK Hynix, which, frankly, their market cap dominated the market. These two stocks went up like we have Delta, or even Japan has something similar. And as you mentioned, it's about tech stocks in America, which also have a high proportion. Professor, if AI, which is a new technology, you've estimated before that new technologies can truly change the world, but stock prices might reflect exaggerated expectations. Today, in the case of AI, if it crashes, will it affect the global economy? Will it become something that supports the economy and also supports the stock market, and reflects the economy of the country? Is it scary, Professor, for each country?
Just now, you mentioned SK Hynix, right? That went up a lot.
Yes. And other stocks that I've noticed went up a lot are selling to those who are in the AI sector, right?
Yes. Selling chips, right?
Yes. And we... *[clears throat]* ...and we sell PCB boards, right? These are the ones that are currently building AI. This is making AI bigger, right?
Yes. But the question just now was, after they make AI bigger, can we truly benefit from it? Like I asked, have your salaries increased? Have my salaries increased? Because AI has been around for 2-3 years, and mine hasn't increased. But has it made my work easier? Has it made me work more? Has it made me work faster? Yes, but I haven't been able to monetize it yet. And what if we can't monetize it, and we invest so much, and it doesn't come through? If we can't generate revenue, we can't pay tokens.
Mmm. And what they predicted and the dreams they gave us might not materialize, right?
Mmm. And then, it will affect everyone's valuation, America's, South Korea's, Japan's. SoftBank has a lot of capital, and it might end up the same. But right now, SoftBank's stock is doing very well, for example. Like SpaceX, you invested in it. Why did you invest? Because we thought it would build data centers in space, right? In space.
And is it cheap? It must be expensive.
Yes. It must be expensive. So, if it's expensive, *[inhales]* ...but then they build it and make data centers, and then they have data up there, making AI smarter. But we're not willing to pay for AI. I don't know if you pay a lot for a chatbot.
Mmm. I think not much. Or for ChatGPT, we pay about 1,000-2,000 each.
Yes. 3,000, right?
Yes. So, it might not be, it might not yield what we expect, because we're not willing to pay much. Because we haven't earned much yet. We're not seeing our salaries increase from using ChatGPT.
That's more important. Okay, that's B2C. But what about B2B? What about businesses? Have they used it and truly revolutionized their businesses? We haven't seen any prominent use cases where, oh, as soon as they use AI, they become superior to others, and their productivity improves. No one has answered that question yet. But now, everyone says, "Okay, I will do AI." You know? Everyone says, "I will do AI." But I haven't seen that using AI has made my results so great. I haven't seen it yet. And if I haven't seen it, how can we dare to believe that all this investment will yield what is claimed? We have to wait 2-3 years.
It might become like fiber optics, where everyone invested a lot, over-invested, because everyone was competing. Competing to produce AI, and then there will be excess capacity. Excess capacity, prices will fall. Then, many will suffer.
Mmm, yes. Professor, on the other hand, because now many tech companies are laying off people.
Yes. This reduces consumption.
Humans have to consume. They will have to buy AI, pay money to AI. But when humans have no income, economic activity shrinks, right? Or will it just inflate or grow in other parts of the economy, specifically in the AI-related sector?
You know, if AI is truly good, if it's truly good, it should make me much more productive, to the point where my salary increases significantly, and then I will spend on this and that. And then I will create jobs for others too, right? I might become very wealthy, to the point where I can hire many people, or I might start a company because my profits are so good that more people will come to join. That's possible. But we haven't seen it yet. We haven't seen it. If AI makes people look like us talking, it's useless. On the contrary, it's even harmful. People don't look at the negative side. For example, do you remember the story of Mythos?
Mmm. The Mythos that Anthropic released, saying it's very good at finding your cybersecurity weaknesses.
Yes. They released it, saying it's very good. They released it to only the first 100, no, only the first 50 companies closest to them, as partners.
Now, the American government was shocked that this Mythos is truly good, it's very good at finding our weaknesses. The American government said, "We need to control it." Right? Most recently, Mythos said, "Okay, perhaps we need to expand it to another 150 partner companies." Because it's so good. Okay, what does that mean? It means that they know their competitors will also produce something like Mythos, similar to Mythos, and will compete for the market. Others will do it. China will do it.
Now, if these things are produced, this is not making us more productive. We are more afraid of our cybersecurity. And will this lead to reduced productivity, not increased productivity? And America cannot control technology, no one can control it, because there is no system for overseeing technology together. In the past, there was cooperation between all countries in the world. Now, Trump has destroyed everything we had, good relationships, cooperation, whether it's the WHO, or climate change, which Trump let everything become... without rules. And if you have this, everyone will rush to make Mythos.
Mmm. China will do it, Russia will do it, maybe North Korea will do it.
Instead of the productivity of countries increasing, AI is causing us to have increased costs.
There's another side to it.
Mmm. So, I'm not sure if productivity is increasing on one side from AI.
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