Chief Investment Strategist, The Freeport Society
Seven trillion dollars is still a lot of money. Even in an age of multitrillion-dollar deficits and $34 trillion debt loads.
If you took the combined market values of Microsoft Corp. (MSFT), Apple Inc. (AAPL), and Facebook parent Meta Platforms Inc. (META), they’d add up to about $7 trillion. It’s also roughly the size of the combined economies of Germany and the United Kingdom.
So, yeah, that’s a lot of money.
Yet Sam Altman, the founder of OpenAI, the company that brought us ChatGPT, is reportedly looking to raise that much money in investor capital to plow into semiconductor manufacturing.
Why?
Because, as Altman complains, the processing power to drive the next wave of AI innovation just flat out doesn’t exist. We need to massively ramp up chip production to make it happen.
Altman isn’t going to raise $7 trillion. While I don’t like to write things off as impossible, this initiative certainly is. You don’t snap your fingers and make the equivalent of a combined Microsoft, Apple, and Meta materialize… even if your potential funder has 100 billion barrels of proven oil reserves.
And even if he were able to raise the cash (hey, the Federal Reserve could always print it for him, right?!), actually deploying it on any reasonable timeframe would be impossible as well.
Where would you find the machinery and the engineers who know how to use it on that scale?
But here’s the deal…
I love the fact that Altman has the audacity to try. It shows he’s full of quintessential American spirit.
Yes, it’s insane. But so was building the transcontinental railway across the unforgiving expanse of the American West… or digging the Erie Canal, although that wasn’t nearly as insane as digging the Panama Canal. Starting Amazon.com Inc. (AMZN), the world’s largest internet retailer, out of a garage in Bellevue, Washington, was insane, too.
It was all crazy… and written off as impossible. Yet with grit, sweat equity, and the sheer audacity of American capitalism, look where we are today.
So, as impossible as it is, I’m rooting for Altman. I want him to prove me wrong. I want him to raise $7 trillion… and I want to see it deployed into the biggest, baddest infrastructure project in history.
AI is already reshaping the world. Imagine what it will be capable of doing after a massive surge in new chip production.
Dream big, Sam.
If only our leaders would do the same…
What Happened to Our Country?
Our leaders used to dream big once upon a time. We sent a man to the moon, for crying out loud. It sounded insane when President John F. Kennedy proposed it to Congress in 1961… and then we did it just eight years later.
It was crazy fighting a two-front war against Nazi Germany and Imperial Japan after a huge part of our navy was destroyed at Pearl Harbor. But we did it… and we won in less than four years.
It was written off as ludicrous when Ronald Reagan told Soviet leader Mikhail Gorbachev to “tear down this wall” in 1987. And yet it came down just two years later.
This was a country that believed in its manifest destiny to conquer the unconquerable and do the impossible. And it delivered.
Yet… look at the clowns running the show today.
We’ve had both Republican and Democrat presidents come and go, but none could conceive of and implement a coherent policy for the border.
The Biden administration was clearly caught with its pants down and had no plan to deal with surge after surge of migrants arriving from the south.
Donald Trump based his original candidacy on building a wall that never got built.
And now, rather than rolling up their sleeves and legislating any attempt at a solution, the House of Representatives opted instead to impeach the top border official, Secretary of Homeland Security Alejandro Mayorkas.
Being incompetent isn’t an impeachable offense. If it were, then virtually every Cabinet secretary in every presidential administration of my lifetime would have been dishonorably discharged. Maybe we would all be better off if they had been.
Unfortunately, our politicians and leaders are more interested in social media likes and prime-time talk show appearances than in actual policy. We have a government whose only real function is crying for attention on social media like a moody teenager… and a mainstream media ecosystem that effectively encourages it because it’s good for ratings.
This is the Age of Chaos.
Our political system is broken and it won’t be fixing itself. We’re $34 trillion in debt and adding close to $2 trillion a year to that total.
Even if our leaders somehow found the integrity to dream big, we’d be too broke to actually do anything. They’ve spent us into national insolvency while not having much to show for it.
To survive – to thrive – under these circumstances, we turn our attention away from the political circus and toward big dreamers… toward men, women, and businesses working hard to find real-life solutions for the problems our politicians create.
I’ve found one such business that I will be adding to our Freeport Investor model portfolio next week, when we publish our February edition. If you’re a member, watch your inbox closely (or log in here regularly). If you’re not yet a member, here’s what you need to know.
To life, liberty, and the pursuit of wealth.