00:00 Speaker A
So let me ask you, so we were just talking about Brent Thiel there, uh, wanna stick with, listen, Trump 2.0. Tariffs are front and center. Um, I want your line of sight about what that means for, for one sector that you know very well, which is robotics, right? How should investors be thinking through puts and takes there?
00:27 Speaker B
Yeah, I think it’s good to look kind of back to the last five years. We, we’ve seen, um, the US, I, the global robotics market was, uh, in a contraction or flat. We’re not seeing growth. We saw China, which is 70% of industrial robots, that’s starting to decline. We’ll see how everything shakes out this year. So we saw end markets tough. We saw US construction manufact, for manufacturing at a record high of about a 200 billion run rate. So we’re seeing all this capacity built up, and these are actually from Biden policies with the chips act, inflation reduction act. So we were already leading with a bunch of carrots there. Now, with the latest, we’re kind of turning carrots into sticks and, and whacking people that were already investing. So like, you know, speak softly, carry a big stick. Now we’re, we’re, we’re smacking around with a carrot, uh, a bunch of companies that were already investing a lot of money into capex and stuff in the US. You have a lot of Japanese companies that are going to be front and center with global reshoring, global nearshoring and, uh, and like an industrial rebasing of localized infrastructure build out. They’ve been hit really hard year to date, both from a tariff front and also, you know, in expectations of investment front, which is ironically, I’m sure, kind of the opposite intent of what we’re, where we’re heading.
02:16 Speaker A
Right. And even some of those that have done the reshoring, if they’re importing aluminum or steel to build, to, to make the robotics components, they’re gonna be tariffed on those items.
02:36 Speaker B
Exactly, which is why it probably won’t, like I don’t see a world where that actually sticks, because if you actually do want to build stuff in America, you have to get the, the inputs down. I mean, we just, I saw today that, uh, lumber was bumped up. So now constructions, you know, going to go down. Like that’s the, it’s just, you know, economics and physics. Um, but again, from the, from the longer term picture, this kind of reminds me of where Nvidia was at in 2022, where we saw PC and gaming going down, but like the bigger picture was like, there’s this big wave coming. And right now, if we kind of think back what’s happened this year, we had Deep C, we had Stargate. We had, uh, Nvidia at GTC showing a bunch of new robotics modalities, simulations, uh, and humanoids, right? So if you think of like, where are we heading? If we kind of ignore like the, the, the fray for a second, like the bigger macro picture is that, you know, we’re looking at the, the end of two years of really tough robotics market, but we’re looking at the dawn of a new super cycle. And it’s not just a trend, it’s not a theme. This is where, if we’re going to reshore anything in America, probably gonna be more high tech stuff. It’s gonna be very advanced manufacturing. We’re not gonna be doing shirts, socks, things like that here.