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Yes, I think the Inflation Reduction Act (IRA) will likely undergo revisions. The biggest losers here will probably be companies like Intel. I think Intel has been struggling, and this is just going to add fuel to that fire. The IRA was originally going to be a huge opportunity for Intel, but now they’re on the wrong side of that trend. From a chip perspective, there’s a much bigger focus on AI build-out, especially in the U.S. With tariffs on China, there could be carve-outs, which is why I don’t think companies like Nvidia will be negatively impacted. The same goes for Tesla and Apple. That’s also why Musk’s influence in the White House is so important.
Let me get your feedback, because I know Ed wants to jump in. But I'm curious: do you think Trump won’t live up to a lot of the things he promised during the campaign?
What gives you such conviction that Trump will focus on AI right out of the gate? I think it's going to be a huge focus within the government. The government has been way behind when it comes to AI. There are going to be huge initiatives, I believe, especially through the DOD and various agencies. This will be bullish for Microsoft, Amazon, Google, and other big names. I think these companies will benefit greatly in what is shaping up to be a golden age for AI, especially with the government's involvement.
I want to ask you about Elon Musk. If you'll allow me, let me put it this way: the market tried to make sense of the Tesla move. It's believed that Trump will repeal some or all of what's been legislated for consumer incentives and manufacturing support for companies. There's also the association between Musk and Trump. Why is it that Tesla stands out in your mind, while GM, Ford, and Rivian might not do as well?
Sure, that's a great point. Let me break it down into two parts. First, removing the $7,500 credits will create a much more even playing field. Tesla has scale and scope, which will give them a huge advantage over the Detroit stalwarts. That’s bullish for Tesla. They also still have the option to cut prices further. But the big thing is the value that’s unlocked with the IP. When you look at Trump, he's going to pave the way for autonomous vehicles. I think he will fast-track Full Self-Driving (FSD), which is very bullish for Tesla.
For Musk, one of the best strategic moves he made was aligning with Trump. Is the technology ready? Not necessarily in its current form, but it’s advancing rapidly. When I look at autonomous FSD, I see an incremental $1 trillion valuation. You could have cyber cabs or automated vehicles by 2026 or 2027, and these initiatives will be fast-tracked. Tesla and Musk are the big winners here, along with big tech. Another key point is that Trump is likely going to focus on reducing regulations, which will benefit deal-making across big tech.
There's a lot to be bullish about, but one area of concern is infrastructure. For a lot of this to happen, the growing chip sector in the U.S. is crucial, and that depends on the CHIPS Act. That could be undermined.
I think the reality might be worse than the bite when it comes to tariffs. Some of them could be much nastier, but I think there will be carve-outs for certain exports. So, I don’t think the impact will be as negative for tech and the supply chain. That’s why this is such a Goldilocks scenario for tech, and it’s a champagne moment for Tesla investors.
Dan, can you hear me?
Okay, here's the question: Be honest with me—can Elon Musk have an informal or formal role in the administration while still being the CEO of Tesla, SpaceX, and leading other ventures like Neuralink and The Boring Company?
Yes, I think he could have an informal role, but not a formal one, like a cabinet position. A formal role would complicate his ownership of Tesla and other companies. However, I believe he’ll be an unofficial advisor with significant influence within the White House. This could end up being one of Musk’s best strategic bets, aligning with Trump.