Marcus Johnson: Hey, gang, it's Friday, July 10th. Jacob, Nate, analysts, welcome to Behind the Numbers, an eMarketer podcast. I'm Marcus, and joining me for today's conversation we have two AI experts. Analyst living on the left coast, Jacob Bourne.

Jacob Bourne: Hey, Marcus. Happy to be here today.

Marcus Johnson: Hey, fella, thank you for being around. We're also joined by principal analyst living on the right, Nate Elliott.

Nate Elliott: Aye up, duck.

Marcus Johnson: Oh, what do we have there? What

Nate Elliott: just

Marcus Johnson: happened there? Just a

Nate Elliott: bit of Midlands.

Marcus Johnson: Bit- there's Midlands chat?

Nate Elliott: That's- you tell me.

Marcus Johnson: I- well, no, it's why - Oh ... I tell you. But there's the Midlands is quite a big area. That's where I'm from- Okay ... guys. That's why we're talking about the Midlands. It's the middle part of England.

Marcus Johnson: I am from, uh, the East Midlands, so maybe it's West Midlands chat. Have you been watching Love Island? Is that where

Nate Elliott: this has come from? No. No, I just- Okay ... been talking to English people.

Marcus Johnson: Oh.

Jacob Bourne: Just, just to clarify, is this the fact of the day, Marcus?

Marcus Johnson: It's not the fact of the day. It's the fact of the

Nate Elliott: day. Oh, okay.

Nate Elliott: Oh. Today's fact of the day, Marcus is from the East Midlands.

Marcus Johnson: I am. It's a terrible fact of the day, although most of my facts of the day are terrible, so it's in keeping with that. Uh, today's real fact.

Marcus Johnson: The sheer scale of Alaska. So, Alaska is, is massive. It's 20% the size of the contiguous US. So five Alaskas would make up America minus Hawaii, which is crazy in terms of the size, the area. Alaska's eight national parks make up about 60, 6-0, percent of the total acreage of the entire US National Park system.

Marcus Johnson: However, they don't have the most national parks. California has nine, so one more. Their total acreage is just 6 million acres compared to Alaska's 32 million. Alaska's largest park, Wrang- uh, Wrangell-St Elias National Park, 13 million acres, is double the size of all of nine of California's put together.

Marcus Johnson: Have you guys been? I wanna go.

Jacob Bourne: Yeah. It, it's on my list. It's on my destination list. Okay.

Marcus Johnson: List.

Jacob Bourne: In part because of those numbers- Oh ... those impressive numbers that you're reciting.

Marcus Johnson: Yeah. Nate, how about you?

Nate Elliott: I have never been. I'd like to go. Yes, it is massive. I'm, uh, I'm curious how much larger it is than Britain or other smaller countries.

Marcus Johnson: Mm. Uh, you could fit the UK into this national park, I believe.

Nate Elliott: Okay. Okay.

Marcus Johnson: And have, and have room to spare. And

Nate Elliott: have room. Yeah. It's, uh- And,

Marcus Johnson: and

Nate Elliott: maybe squeeze in a bit of Ireland as well ...

Marcus Johnson: two and a, easily, two and a half Texas' is Alaska, uh, I believe. The National Oceanic and Atmospheric Administration, NOAA, N-O-A-A- Noaa

Marcus Johnson: uh, inclu- includes all the intricate shapes of islands, inlets, sounds, and bay shorelines, putting Alaska's coastline at 34,000 miles. That's like driving back and forth across America six times. Yeah. Good God. What's going on up there?

Nate Elliott: That's a lot. I mean, perhaps the most notable thing in all that, though, is that there's a park called St.

Nate Elliott: Elias, uh, because the man who invented what we now know as a marketing funnel was named Elias St. Elmo Lewis- Ah ... which is not the same, but-

Marcus Johnson: Hello ...

Nate Elliott: has some of the same words.

Marcus Johnson: Which is why I picked it. No, it's not. Of course. Of course. Today's real topic ... Welcome. Good pivot. Welcome to the Mangos Era: AI's Biggest Players Choose Their Lanes.

Marcus Johnson: Ryan Mac and Lauren Hirsch of The New York Times note that 25 years ago, roughly, uh, Adeo Ressi, former college roommate of Elon Musk's, begged the tech entrepreneur not to start a rocket company. Mr. Musk had just made millions from the sale of PayPal, which he helped create, to eBay. He and Mr. Ressi were looking at ways to send terrestrial plant life to Mars.

Marcus Johnson: They had a $50 million budget, which wasn't enough, uh, to build a rocket, so Mr. Musk said, "I'm gonna build one myself." Fast-forward to SpaceX's debut on the stock market as the world's largest IPO. The rocket company, now valued at $2 trillion, has launched hundreds of rockets into space, op- operates a dominant satellite internet service, Starlink, and oversees Mr.

Marcus Johnson: Musk's AI efforts and social network called X. The company's IPO was so huge that Mr. Musk became the world's first trillionaire. Side note, this should've been my fact of the day. The article points out that when oil tycoon John Roc- John D. Rockefeller's fortune was at its height in 1937, his $1.4 billion net worth was about 1.5% of US GDP.

Marcus Johnson: University of Chicago economist Steven Durlauf estimates Mr. Musk's net worth is now the equivalent to 3% of US GDP, and he has three times as much money as the second wealthiest person in the world, Google co-founder k- uh, co-founder Larry Page God. Anyway, SpaceX raised $75 billion from its offering, more than the combined amount of all the US IPOs in the past two years, says Renaissance.

Marcus Johnson: Renaissance? Either way, Capital. Zooming in, guys, on the AI part of SpaceX. Earlier this year, it acquired Musk's AI startup, xAI. Space- SpaceX has plans to expand its data centers on Earth, develop AI microchips, and launch what it calls orbital AI compute infrastructure data centers in space. Jacob, I'll start with you.

Marcus Johnson: What does this SpaceX IPO say about xAI's place in the AI race? Oh.

Jacob Bourne: Yeah. Well, I mean, even before the IPO, I think xAI, uh, its frontier models had largely, you know, closed the gap with, you know, competitors' frontier models in terms of performance on many metrics. Hmm. So I think this IPO really signals that xAI, you know, folded into SpaceX, is just another very capital-hungry AI company.

Jacob Bourne: Uh, it just needs a bigger balance sheet to, you know, fund that capital, uh, hunger. Um, and so, uh, the move itself, I think is a kind of a double-edged sword for xAI. On the one hand, it ha- now has access to SpaceX's... or full access to SpaceX's resources, um, its clout. Hmm. Um, and I think, you know, the downside is that xAI now is part of SpaceX's, uh, lack of profit- profitability story, and so I think that kind of amplifies the profitability question that's the heart, uh, at the heart of the AI, uh, sector right now.

Jacob Bourne: Now, I think a, a big part of SpaceX's current valuation is tied to this notion of what you talked about, Marcus, this outlook that it's gonna launch a bunch of AI data centers into space. Hmm. The problem with that is that the technical feasibility of that being more efficient than Earth-based, uh, data centers hasn't been proven at scale, which makes SpaceX a very risky investment.

Jacob Bourne: Hmm. Um, and we're seeing that reflected in, in the sort of the aftermath of, of the IPO.

Marcus Johnson: Yeah. Nate, um- Ryan Mac of the New York Times saying investors, they're basically, they're, they're betting on the future. They're not betting on the current, uh, business performance, rather Musk's promises of what the company will do.

Marcus Johnson: Uh, so Jacob kind of outlined it, what their, their plans for AI, um, might be. What do you make of, uh, what this IPO says about, uh, AI's place, uh, xAI's place in, in, in the AI race?

Nate Elliott: I, I'm not sure it says a whole lot. I mean- Hmm ... a- as Jacob pointed out, this is just a very small part of a much larger company.

Nate Elliott: And even if you look at the quite funny total addressable market calculations that they put into their securities filings, uh, the stuff that looks like xAI is maybe 10% of the TAM that they're talking about. So looking at this entire company and its valuation and trying to understand what that means about xAI and the AI market's kind of like looking at McDonald's revenues and trying to figure out what that says about salads.

Nate Elliott: Uh, it's in there somewhere, but it's not why anyone would go and spend money there.

Marcus Johnson: Mm-hmm. Um, so how much do you guys think that this xAI is linked to, um, to SpaceX? Like, if SpaceX doesn't do well, is that a referendum on ... Like, is there a world where xAI does very well but SpaceX is actually struggling, do we think?

Jacob Bourne: I mean, like I think in part of this folding xAI into SpaceX is part of Elon Musk's very long-term vision for how AI and, and, you know, space exploration are g- are going to be, uh, very closely linked together. But that's a very distant vision. In, in the near term I think that the, the, the fundamentals of each, uh, SpaceX and xAI, um, are, are very different.

Jacob Bourne: And so I don't think that ... I mean, xAI is a, you know, it's a consumer-facing, uh, chatbot company. Um, SpaceX is a rocket company. So I think that, uh, there's a, a, a pretty significant financial divergence there. Um, but I think, uh, what I foresee is that xAI's performance is gonna increasingly be, be dependent on SpaceX.

Marcus Johnson: The books for SpaceX, just to stay on SpaceX for a second, we'll get more into the AI part in a second, but the books don't look great. Um, Jim Chanos, the founder of investment company, firm Chanos and Company, uh, they predicted the 2001 collapse of Enron, um, was concerned about the finances. Said they're losing $4.3 billion they did in Q1 spending so much on AI development.

Marcus Johnson: Revenue is about 5 billion and growing, um, but their revenue's 10 times smaller than Meta despite being valued at more than Meta. However, some very optimistic, uh, outlooks for how much they could make. Goldman Sachs, who did help SpaceX with their IPO, told a potential investor, um, that it can expect SpaceX's total revenue to reach nearly $500 billion in 2030.

Marcus Johnson: That's up from 20 billion last year. Morgan Stanley also working on the IPO said SpaceX's revenue would hit three and a half trillion by 2040 according to the Wall Street Journal. And the chap who's part of the, the Big Short book and movie, Michael Burry, uh, uh, hedge fund manager, uh, investor, um, he noted, uh, that the S1 suggests

Marcus Johnson: He says nothing in the S1 suggests it's worth $1 trillion, let alone two. Um, f- a year ago it was valued at four and a half ... Uh, sorry, four to five times less than what it is right now. So it is, it's just really hard w- with xAI being folded into SpaceX, but then also with this very, I say inflated, but inflated valuation to figure out what's going on exactly with, with AI and the AI ambitions.

Jacob Bourne: Yeah I mean, if the AI- AI data c- AI data- data center in space bet pays off, then SpaceX and xAI by, you know, proxy will be extraordinarily valuable.

Marcus Johnson: Valuation likely to regulate itself over time. JP Morgan analysts were saying that recent average IPO share price increase stood at 32% after day one of trading, but down 26% after 12 months.

Marcus Johnson: So expect it to come down. Um, they did really make a big AI move, uh, post IPO. The company bought Cursor for 60 billion, AI-powered software development platform and coding assistant. Any thoughts on that at all, or is it too early?

Jacob Bourne: My, my thought is just that, you know, in terms of examining or quantifying the ROI o- on AI so far, I mean, the, you know, the code development use case is the one that has sort of the clearest numbers to, to back that notion that, yeah, the, all the spending will pay off.

Jacob Bourne: Mm-hmm. Even then, it's, it's, it is a little bit fuzzy. But I think that is, you know, what that acquisition is about is that this is, you know, coding, software development, um, app development i- is, uh, the, the most clear cut, uh, you know, bull case for, for AI. Um- Mm-hmm ... AI's payback, uh-

Marcus Johnson: Yeah ...

Jacob Bourne: right now.

Marcus Johnson: Um, John Ruwitch and Jeff, uh, Brumfiel of NPR writing that SpaceX's IPO is the first of three big tests of investor appetite for AI-related tech companies.

Marcus Johnson: ChatGPT maker OpenAI and Claude maker Anthropic have both filed paperwork with the SEC signaling intent to list shares. Analysts say it could happen this fall. Nate, why are so many AI companies racing to IPO this year?

Nate Elliott: Because they're burning money at an unconscionable rate and they need to find new sources of capital.

Marcus Johnson: Mm-hmm.

Nate Elliott: I mean- They need money yesterday ... we've, we've, we've never seen this kind of CapEx spend. Mm-hmm. Um, it's, it is absolutely phenomenal how much money these companies are spending, and almost equally phenomenal is how little money they're making, uh, to help them keep spending. Mm-hmm. And so OpenAI in particular has tapped literally every source of private capital it could find anywhere on Earth, and the next source of capital is almost certainly gonna be the public markets.

Nate Elliott: Uh, Anthropic has also raised a lot of private money, and its next best bet seems to be going to the public markets as well. Uh, both of these companies are spending in preparation for a future in which AI takes over everything, and therefore is a wildly profitable and successful business, but that's not where we are right now.

Nate Elliott: Mm. And if you believe that vision of the future, then these things could make great investments. This category could be a great investment. Uh, but, um, you have to believe that version of the future. Uh, you have to believe that the specifi- specific company, uh, you're investing in is likely to win in that vision of the future, and you have to hope that- Uh, even if AI does take over the entire economy, that the amount of revenue that will flow to the AI companies will justify and pay back the amount of spending that they're doing right now to try to win.

Nate Elliott: Mm-hmm. And it's not clear that any of those things will be true. It's not clear that AI will actually take over the entire economy. NVIDIA's trying to make sure it does, but, um, but that's not clear. It's not clear whether the two companies that have confidentially filed for their IPOs are going to be winners in the space.

Nate Elliott: And it's not clear that any company, even if they are the big winner in AI, will be able to justify with revenues five or 10 years from now the amount of money that they're spending today, and will have to continue spending to become leaders in the space. So- Mm-hmm ... this is all an enormous bet. And, um, and, you know, it, it's an enormous bet that requires a lot of capital, and they're just looking for capital in all the places they can, and public markets are, are a big place to look for that money.

Marcus Johnson: Yeah. Ja- Jacob, to Nate's point, uh, they need money. Uh, also there's Lopatto, uh, of, uh, The Verge was saying that going public first, uh, means that you get to scoop up better, uh, the better investors. Yeah. Um, so maybe that's why there's, there's this race to, to IPO this year. But I wanna throw this at you 'cause touching on what Nate just, um, kind of ended with, which is, is from New York Times saying, "Whilst AI is only one component of SpaceX's business, how SpaceX fares among investors will be a crucial gauge of how the average person feels about investing in the public offerings of other AI companies that are believed to be far from profitable."

Marcus Johnson: Do you think this, uh, IPO from SpaceX is somewhat of a bellwether in terms of what we can expect from the other companies this year, uh, OpenAI and Anthropic? I,

Jacob Bourne: I mean, I, I think it's, it has a lot of ramifications, yes. Mm. And, and going into the year there was a lot of, you know, talk about how 2026 would be this blockbuster, uh, year for IPOs.

Jacob Bourne: But I think because of all the things that Nate talked about, and because of s- how things went with SpaceX's IPO, you know, the debut was very strong and then things came crashing back to Earth. I think that now we're, we're looking at less un- less certainty a- as far as, you know, uh, subsequent IPOs this year.

Jacob Bourne: For instance, OpenAI is considering delaying its IPO to 2027. I wouldn't be surprised if Anthropic is doing the same. Interesting. Uh, Cerebras, uh, AI, uh, chip company also had a big IPO and, uh, somewhat of a s- similar, um, outcome to, to SpaceX. Strong start and now it's, it's seen its, uh, a lot of stock, uh, volatility and most recently a, a plummet in its, its share price.

Jacob Bourne: So-

Nate Elliott: Mm.

Jacob Bourne: Um, I, I think that- You know, th-there was this IPO race going into the beginning of the year, and then, uh, we, there was this, there's just been more talk about, um, an economic reckoning for AI. Mm-hmm. I think the questions about whether this all pays off are getting, uh, harder, uh, to answer. And so that has really dimmed the outlook for this really being the, the, you know, the blockbuster year for IPOs.

Jacob Bourne: So I think part of that is, is SpaceX as well.

Marcus Johnson: Mr. Roach and Mr. Brumfiel, uh, of NPR writing that, uh, all three companies, SpaceX, um, uh, Anthropic and OpenAI, um, they're, they're huge and that, uh, AI is taking, certainly taking the world by storm. But the big question, uh, marks hang over future profitability. To date, they have been burning cash, as Nate was saying, to develop AI and subsidize usership.

Marcus Johnson: Uh, Mr. Roach notes that the public listing of shares by SpaceX, and later Anthropic and OpenAI, will open up these companies to scrutiny that as private firms they have not yet faced. Listed companies must file public quarterly and annual financial reports and more, giving investors a look under the hood.

Marcus Johnson: Songyi Yoon, uh, managing partner at Principal Venture Partners, says, "These IPOs are a sobering moment. Early investors like venture funds, uh, buy into these, uh, into the possibilities and promise of startups and new techs like AI." She says, "The public market places more value on profits and practical business models.

Marcus Johnson: And at present, the public has limited ability to assess these companies' profitability." Nate, um, what will the AI world look like, um, post-IPO of these three giants? Better for business or shareholder distraction?

Nate Elliott: I'm not sure it's gonna be better for business. I mean, listen, they're, they're gonna have an infusion of capital that they need to spend to, to keep up with their frontier models and data centers and all the other things that are required to really compete in this marketplace.

Nate Elliott: Uh, but they've shown that they spend through that money just unbelievably quickly. I mean, Anthropic in particular confidentially filed for its IPO less than 72 hours after closing a massive round of private financing. The, the hunger for money is almost endless. And as soon as these guys get through an IPO, I imagine we'll start hearing about secondary offerings and returning to public markets for even more reve- um, even more cash injections.

Nate Elliott: So the money's important. They, they, they can't continue to function without the money because they are nowhere near making the money that they need by selling their products and their services. Having said that, all of it, uh, as you point out, comes at an enormous cost. Uh, I've been at a technology company that was private and went public, and the amount of distraction, not for investors, but inside the company, is phenomenal.

Nate Elliott: Employees can lose their focus. Mm-hmm. Uh, they, uh, both because they're pulled in a lot of new directions, uh, especially those who work in any field that is close to the new reporting requirements that are put on public companies. But also, you know, you sit there and watch the stock ticker go up and down, and if you're on the kind of rollercoaster that SpaceX's stock was on in the first week or two- Mm-hmm

Nate Elliott: then you really do spend a lot of time focused on it and maybe less focused on the work that you should be doing. Yeah. Um, there's a lot of distraction for everyone. And- While they need the money, and they have to do this because they can't continue to function without new investment, uh, it's a problem.

Nate Elliott: It's, it's gonna be a challenge for them in terms of, in terms of keeping everyone focused on continuing to build good products.

Marcus Johnson: Yeah. Jacob, what do you think? Yeah, I mean- Better for business or shareholder distraction?

Jacob Bourne: I, I'm gonna go with shareholder distraction, at least in 2026. I mean, I think that the IPO, uh, doesn't fix the underlying economic problems for the AI trade.

Jacob Bourne: It does bring in m- more, uh, avenues for, for cash, for fundraising. It sparks, uh, you know, investor interest. It helps, uh, these companies tap into the enthusiasm, uh, among the, you know, retail invest- investor class. Uh, but that's a bit circular as well because a lot of those retail investors have g- have gotten into the market just because of AI.

Jacob Bourne: And so I think the, the growth trajectory needs to, to prove itself. A lot of these companies have long-term missions and, and a vision for what they're gonna do with the technology, and I think that-

Marcus Johnson: Mm-hmm ...

Jacob Bourne: the short-term, quarterly, um, optics game that they now have to play, uh, can be a distraction from that.

Jacob Bourne: Yeah. And I spe- think especially for a company like Anthropic, whose mission is really tied to, uh, this AI safety work. Yeah. Um, that could really come under threat from, uh, uh, from market pressure. So we don't know how that that's gonna play out.

Marcus Johnson: Let's end with MANGOES. Why wouldn't we? Uh, first it was FAANG, FAANG companies, Facebook, Apple, Amazon, Netflix, and Google, the rapidly growing US tech stocks around 2013.

Marcus Johnson: 10 years later, they morphed into The Magnificent Seven, Meta, Apple, Amazon, Alphabet, Microsoft, NVIDIA, and Tesla. And now the new acronym is, uh, there's a new acronym in town, the AI giants acronym MANGOES, Meta, Anthropic, NVIDIA, Google, OpenAI, um, and SpaceX. Uh, my question, gents, is how much of these, uh, um... So these are the, the, the six AI giants.

Marcus Johnson: How much are they actually competing with each other? 'Cause it feels a lot like they're choosing their own lanes. So, like Meta's using AI, and there's some overlap, maybe there's a lot of overlap, but it feels like Meta's using AI, AI to engage social network users and sell ads. Anthropic's focused on AI enterprise tech.

Marcus Johnson: Uh, NVIDIA makes chips. Um, Google, AI search. OpenAI, who knows? Kind of everything. Uh, SpaceX leasing computer power to big AI, um, developers, and xAI has chatbot Grok. They're doing other stuff as well, but i- is it fair to say, Ja- Jacob, I'll start with you, that actually these companies aren't competing as directly with each other as we might think?

Jacob Bourne: My take is that they're competing directly. Just because of the sheer scale o- of the AI stack, you know, certainly we're seeing some pressure to be in a certain lane. But I, I see it basically as a racetrack with no lanes, and there's a lot of weaving around going on. Um, so basically, you know, you have a situation where, I mean, you have NVIDIA, for example.

Jacob Bourne: Yeah, I mean, it started out as, you know, a, a, a chip company. Uh, now it's, you know, investing heavily in a lot of other things, including o- open source, uh, model development for... And that's just one example.

Nate Elliott: Mm-hmm.

Jacob Bourne: Um, you have Google, a AI model search giant. Um, it's-- not only has it been investing heavily in building its own, uh, AI chips for internal use and for customer use, but now it's eyeing actually, um, taking NVIDIA, um, you know, competing with NVIDIA more head-on on the AI chip trade.

Jacob Bourne: Um, SpaceX, uh, I, I think is a great example. I mean, it's in all kinds of lanes now, um, including with, you know, selling com- ex- ex- excess compute power to, to competitors and of course the AI data center bet.

Nate Elliott: Mm-hmm.

Jacob Bourne: Uh, I think Meta is one interesting, um, category too, where, where, yeah, certainly there's been its, its lane of, uh, you know, social media chatbots and of course, uh, uh, you know, integrating, um, AI into, to its own advertising stack.

Jacob Bourne: But I think that, you know, its recent launch of AI mode, uh, for, for its social media platforms kind of shows that it's, it's not even trying to hide that it's, that it's competing directly with Google on the, the, uh, the AI search front. So, um, and then of course there's, you know, there's A- Anthropic a- and OpenAI similarly.

Jacob Bourne: Um, you know, i- i-- earlier on, it seemed like, okay, OpenAI was really courting c- the consumer market, and Anthropic was cour- courting the enterprise market. But now, uh, they're both, you know, courting all markets, uh, simultaneously. Uh, so I, I really s- think that as much as there, there's limitations to how many lanes they can each be in, uh, they're all pretty much squarely, uh, competing with each other because I think they fear, uh, that they'll, they'll, they will come down to just one or two dominant players, uh, for the entire stack- Hmm

Jacob Bourne: and they wanna make sure-

Marcus Johnson: Nate, what'd you

Nate Elliott: think? Um, I think it's all a bit silly. Uh, I think MANGOs is a bit silly. Uh, and everything Jacob said is correct. But to, to focus on the MANGOs acronym and to focus on whether they're competing or staying in their own lanes is to force your view of these companies and the industry exclusively through the lens of AI.

Nate Elliott: And make no mistake, these six companies are all very heavily involved in AI, and they're all spending unbelievable sums of money on capital expenditures around AI. And also make no mistake that most of these companies have almost no revenue from AI, and most of these companies are not AI businesses.

Nate Elliott: They're businesses that do other things. Uh, Google makes all of its money selling advertising and hardware. Uh, and we're not talking about AI chips. They make a little bit from that. We're talking about smart home speakers and mobile phones. Uh, Meta makes all of its money selling advertising, and I mean all of it.

Nate Elliott: The AI revenues at Meta round to zero. Mm. SpaceX makes all of its money launching things into space. The AI portion of its revenue is maybe one-sixth or one-seventh of the business, and the other five-sixth or more of the business come from launching rockets into space. You can look at the market, say everything is about AI, and come up with a list of the biggest companies spending the most money in the space, and that's what the people who talk about MANGOs are doing.

Nate Elliott: And you can talk about whether they compete with each other. But at the end of the day, you know, Alphabet made a quarter of a trillion dollars last year just from search advertising. Not from- Right ... anything else that it does. Just from search advertising.

Marcus Johnson: Right.

Nate Elliott: Um, the entire- I think that- ... AI industry won't come close to that number for several years.

Nate Elliott: Yeah. And that's one company and one line of business. These are not AI companies. They're companies that do- Yeah ... other things incredibly successfully and that are investing heavily in AI hoping that it becomes the next big thing. But it's asking whether they're competing with each other misses the point, which is they're different companies that do different things, and they're all hoping that AI becomes a big part of their future.

Nate Elliott: And right now- It's simply not what they do.

Jacob Bourne: Yeah, I mean, I, I think the caveat there for Microsoft, Amazon, a- and Alphabet, right, is just on the cloud front. I mean, their, their cloud business growth from those three companies is really coming from the AI spending of other AI companies. And so it's circular, but they are b- building, you know, gaining meaningful re- revenue from their AI cloud, uh, division.

Jacob Bourne: So that's, I think, one area- Mm-hmm ... where I would say is an, an exception to what you're saying.

Marcus Johnson: Yeah. Yeah, that's a good point. And Nat, Nat, Nat, Nat, I take your point, um, on the, the money side of things. Um, I think the guy who came up with this was thinking it's, this is the, these are the companies that are shaping the AI world we live in.

Marcus Johnson: So of all the money that's spent on AI, these guys are taking up a large share of that. But to your point, yeah, that is, is a good one, that they're not AI companies. Um, they're companies who are using AI. I mean, staying at least with

Nate Elliott: the companies with the biggest revenues and- Right ... the biggest consumer footprints, and mangoes doesn't fit either of those descriptions.

Nate Elliott: Mm-hmm. Next year we'll be talking about coconuts or papayas or something else. Apples. And, uh, I think that one's covered, but sure.

Marcus Johnson: All right, fine. If it's gonna be, it has to be a Pink Lady. I don't wanna hear anything about Granny Smith, okay?

Jacob Bourne: I, I think we have a, if we have another acronym by as early as next year, I, I don't think it's gonna stick is my prediction.

Jacob Bourne: No one's gonna remember all these acronyms.

Nate Elliott: Marcus, you're, you're a Pink Lady apple guy?

Marcus Johnson: Yeah, absolutely.

Nate Elliott: No, Jazz. Jazz apples all the way. Come on.

Jacob Bourne: Honeycrisp, guys. Honeycrisp. Come

Nate Elliott: on. Oh, Honeycrisp has gotten bland, you know.

Marcus Johnson: Really?

Nate Elliott: Yeah. Yeah. They've gotten a little bland for me. Jazz is the way to go.

Marcus Johnson: Uh, that's all we've got time for for this episode, uh, unfortunately.

Marcus Johnson: Thank you so much, guys, for hanging out with me today and talking about fruit. Uh, thank you first to Jacob. Yeah.

Jacob Bourne: It's been a pleasure, Marcus. Thanks so much.

Marcus Johnson: Yeah. Thank you, and of course, to Nate.

Nate Elliott: Thank you very much, sir.

Marcus Johnson: Thank you, sir. Thank you to the production crew, uh, Lance helping us out with this one, and to everyone for listening in.

Marcus Johnson: For behind the numbers, new market to podcast, follow and subscribe to hear about new episodes, and leave a rating, uh, and review if you've been enjoying the show. We'll be back on Monday talking about what Fox buying Roku means for Fox, for Roku, and for everyone else. Not everyone else. Haven't got that mu- kind of time.