Ken Griffin

Josh Brown says that if this is a bubble, it is the most pathetic one he has ever seen, and an anti-bubble. Ed Elson had cited Ken Griffin and Ray Dalio, who both said last week that markets are in a bubble. Josh Brown's reply is that the market prices in skepticism about growth every day. He allows one bubble claim only: today's tech profits may not last. He will not call the valuations a bubble.

Tech earnings growth this quarter is estimated at 65.6% year over year. Without semiconductors and semiconductor equipment, that falls to 24.9%. Western Digital reported $4.64 against $4.11 expected, and Oracle reported $1.92 against $1.74, while the group is still not making highs together. Since

Jenny Johnson says AI feels frothy in some areas, and she would not finance data centers long term because that bet assumes today's chip manufacturing and energy production stay in place for the next 20 or 30 years.

Molly O'Shea brought up Ken Griffin's point from the Citadel Securities Conference: nobody knows chip supply and demand, including when the chips being made now will expire. Johnson remembers a Gartner curve she could not name exactly. New technology gets called the greatest thing ever, runs all the way up, then crashes when people are disillusioned, and later settles where it should. The question is where AI sits on that curve. Demand makes people innovate, so assuming today's

Jason Calacanis says France just saw its worst riots in decades. Protests that started because high schools were dilapidated and underfunded have turned into civil unrest, and they have spread to Italy, Spain, and Albania. More than half a million people have taken part.

Jason Calacanis says more than 3,000 businesses have been damaged, with hundreds of millions in losses. More than 1,000 police officers have been injured, and 2,500 people have been arrested, 70% of them adult men. A 143-year-old city hall in Limoges, 250 miles south of Paris, burned down. He says President Trump and Vice President Vance called this a third world immigration and welfare state issue. France's justice ministe

Jason Calacanis says AI found two critical exploits, nicknamed PHP to shell, in PHP, the open source language that powers about 70% of websites, including WordPress and Wikipedia. The PHP security team rated them 9.2 out of 10.

The plan was one major patch on October 22, the day of the recording. The details leaked, so PHP moved the release up to Wednesday, October 21. Jason Calacanis says AWS then reported a jump in hacking activity, and the Cloudflare CEO said they saw millions of hacking attempts. Governments in France, Germany, Netherlands, Denmark, and Finland started taking websites down. Wikipedia took some systems down to patch them. In the United States, the NSA and the FBI put out

Jason Calacanis says President Trump's approval is so low because the president no longer talks about the bottom half of the country. President Trump talks about data centers, crypto, and a golden age, while people are waiting to hear about the minimum wage, housing, and inflation.

On his tweet about how President Trump could save the second term, Jason Calacanis says the president has to talk about housing as much as he talks about data centers. Raising the federal minimum wage is only a nice gesture, because it impacts 10 to 15 million people. Jason Calacanis says the president signs executive orders for the tech industry and large businesses, and people in the bottom half do not see the

David Friedberg says Elon is going to give every American child, which Friedberg thinks means anyone under 18, one share of SpaceX. Friedberg says the shares have been trading at $150, $160, or $170, which makes the pledge a $10 billion gift, and he believes it will rank among the largest gifts in the history of charity.

He says everyone would have been wealthy, and he points to Australia, where people are happy they are forced to be in the market, and to Norway, where people are forced to do the same. Friedberg says Elon said he is just getting started, and nothing says the idea will not spread as a bit of a contagion among affluent people giving a large portion of their wealth, or even a

David Friedberg says the United States is fundamentally going to need some degree of reset. The country has the same debt to GDP as France and only modestly higher GDP growth, and David Friedberg does not think the United States can run a higher deficit to GDP than France.

How far the collapse goes decides the path. David Friedberg describes a social collapse, with rioting and murder, or an economic collapse like the ones Argentina, Brazil, and more recently Greece went through, where the government got too big to service the debt and the economy had to be restructured. Massive protests, an incredible loss of net worth, and an inflation effect wiped out asset values, and the result was an e

Chamath Palihapitiya says the investors he calls bond vigilantes can break the French government. They can make French debt impossible to finance, drive long-term rates so high that France cannot borrow, and force an economic reset and a grand bargain inside France.

French people, he says, will see on television, TikTok, X, Facebook, and Instagram that France spends twice as much as communist China. The claim that socialism is a better communism, and that France should spend more like communist China or communist Russia, will not hold. A reset done the right way would take on the pension system, student to teacher ratios, hospital wait times, building permits, and rent adjusted inflation. H

Nikesh Arora says companies avoid upgrading old software because technology leaders are rewarded for low cost and for keeping everything available, so an upgrade risks an outage, user complaints, and more spend.

Cyber security is usually 4% to 10% of the information technology budget, and Nikesh Arora says that share is going to have to go up. Financial services and the federal government sit near 10% because they want systems secure and robust. Companies already on the cloud can land at 4% to 5%, because a hyperscaler covers infrastructure security and the company mainly handles application and software security. He puts the band from 4% to 5% on the low end up to 8% to 10% on the high end

Nikesh Arora says AI with no guardrails is dangerous because safety depends on the weakest link, and a company that gives out the raw power of AI with no controls hands a nuclear bomb to anybody who wants it.

He points to debates in the White House on responsibility, alignment, and testing models beforehand. At one level, he says, people want global treaties to manage the pacing and development of AI for good. At the same time, a company can still offer the most powerful tool with no control, no guardrails, and no governance. He compares the offer to a do-it-yourself aspirin kit for building medication, or to handing someone powerful tools, and says he does not understand the business model

Nikesh Arora says the AI compute profit pool lives in NVIDIA and the memory industry and is shifting toward hyperscalers that already hold large amounts of compute. Availability of compute will matter more than the chips. Demand is insatiable, with more demand than Nikesh Arora and Chamath Palihapitiya can imagine.

Eight years ago, when he came to Palo Alto, he shut down all the data centers. The company could not run a global footprint at the scale, speed, and reliability he could rent from hyperscalers. Compute is now highly scarce, so he takes terms rather than dictates them. Building his own data centers is an empty threat. Nikesh Arora says Jensen cannot give him chips for 2028, and la

Nikesh Arora says Palo Alto Networks prefers open source, open weight models because the company can modify the weights, train them, and interrogate the chain of thought.

Palo Alto Networks wants to embrace AI as quickly as many startups. After comparing open source models with cloud models, the company chose open weight models. Over time, enterprises will need explainability and auditability, 100%. In financial services and healthcare, a team cannot tell a boss that nobody knows what happened and the IT group simply put an AI model in place, because a regulator will not accept an answer with no explanation. Financial services and healthcare want explainability, verifiability, and auditabil

Chamath Palihapitiya says most AI spending is circular. One percent of companies represent 90% of AI spending on tokens, and 80% of that 90% comes from unprofitable VC-backed companies.

VCs raise from pension funds, LPs, foundations, and family offices, then put the money into a startup. The startup spends part of it consuming other people's AI, shows revenue traction, and raises again from the same VCs. Chamath Palihapitiya says 75 cents of every dollar is a startup sending money back and forth so the companies can mark themselves up. He calls it a structural problem. Ken Griffin's point, in his telling, is that AI has to diffuse out of the startup ecosystem before it can scale as a predic

Dani Burger asked Ken Griffin how Citadel holds a team together when the center of gravity sits somewhere in the middle of the Atlantic Ocean. She noted that at COVID he was one of the first leaders to say people need to be together. Griffin says the first rule is to keep teams within Citadel in one geographical location as much as possible.

From the top of the business down through the verticals of what Citadel does, Griffin says the verticals stay geographically centered because teams should work together physically whenever possible. Nothing beats a whiteboard and a good debate. His office has a big whiteboard, the boardrooms have big whiteboards, and the walls around neighboring offices

Ken Griffin says growth is the only direction out of the deficits, and he is worried about bond yields at multi-decade highs. The bond market is telling the House and Senate to put the fiscal house in order. Griffin says the market does not say as clearly that the house gets in order by getting productivity up, and he says Washington is not listening yet.

Voters get to say their piece through the House and Senate in a few weeks, and Griffin says the bond market is speaking pretty loudly now too. He says every talking point from Washington should be about entrepreneurism, about productivity gains, and about growing an economy where everyone feels they are getting ahead.

If the House and Sen

Ken Griffin says the person who cut taxes circa 2018 was spot on. The view then was that cutting taxes would reignite American productivity and entrepreneurism. Playing that playbook a year and a half ago had one huge difference from 2018: the spending orgy of the pandemic. Ken Griffin says the country did not have the fiscal space to renew the tax cuts a year and change ago.

People forget, Ken Griffin says, that the United States spent as much money during the pandemic, as a percent of GDP, as the country spent to win World War Two. He calls that bill the cost of sitting on couches. With a federal deficit of 40 trillion dollars, crowding out is now front and center again. Ken Griffin asks

Ken Griffin says there are almost certainly bubbles within the present moment, and any radical transformation of the economy is generally intertwined with a bubble.

He remembers 1999 and 2000, and the metrics used to value Internet companies. Some Internet companies had pretty fanciful business models. He wishes he had kept his Amazon stock from that moment. The Internet was the great bubble, he says, and he asks whether it could be more of a part of daily life today than it is. A few years ago he was updating an Xbox for his son, who was 13. His son looked at him and said, Dad, you lived before the Internet existed. Ken Griffin answered that he was born after the dinosaurs disappeared, but

Ken Griffin says the vast majority of the alpha Citadel creates is still a testament to the creativity, the ingenuity, and the analysis of the people who conduct fundamental research. AI can help shed light on bits and pieces of the work. A person still assembles the narrative.

About a year and a half ago, Ken Griffin said AI cannot produce or deliver alpha. Asked whether his thinking has changed, he says most of the business is fundamental based investing and the core is research, almost like journalism: getting the story right and getting the narrative right. Trading is how Citadel monetizes the research. The team has to understand the business model, the economics, and management incenti