00:00 Speaker A
Just because this is such a disruptive technology, will AI force the hands of CEOs to pull the trigger on these big deals like you're talking about?
00:11 Speaker B
It's certainly a disruptive technology, a game-changing technology. I think this is also a technology that will take away jobs. And we need to keep that in mind. I have never met a CEO outside of a company that is directly at risk from AI technology, and I have never heard a CEO say they need to do something about AI. Um, but our clients outside of technology don't have to rush to trade because of AI. I think they continue to bring AI into their organizations, into their supply chains, into their workforces, and so on. You know, their focus happened to be on AI. Um, it's, uh, all of the clients that we're blessed to work with, uh, that are changing the way they do business. So I think that trend will continue. At Parella Weinberg, our own organization is implementing AI. Well, I think there are three phases to it. The original plan was to give all teammates an AI assistant. This sounds easy, but you can't take it off the shelf. Firstly, we are a highly regulated business, so it's not that easy to bring these into the field. Second, we place great emphasis on confidentiality. Therefore, we cannot afford to let any confidentiality issues, even minor ones, miss the mark. So when our IT team told me they could solve that problem, we allowed it to be implemented in the field. And now we are in the second phase. This is efficiency. So we're now training our AI assistants to become even more knowledgeable about finance and more responsive to what you need as a financial professional. And the last stage is productivity. I think we still have a long way to go before we can actually collaborate with clients to generate and think about ideas right away. Yeah, but right now we're not doing any client-facing work on AI technology. We don't do anything client-facing. I'm just not used to it yet.
02:40 Speaker A
Looking ahead to 2026, where do you think big things could happen soon? I feel like people are forgetting about industrial companies. So we've been focusing on these seven great technology companies and what they're doing and what they're not doing. There are 493 other companies. Many of them are great industries, generate large amounts of cash, and trade at multiples well below magnitude 7. So there has to be value in it. And from an industry perspective, there may even be an opportunity to carve out their companies because they are not being properly valued in this crazy market.
03:26 Speaker B
Yeah. So while everyone focuses on the S&P and Mag 7 because they are naturally concentrated, the S&P 500 has 150 companies and is actually worth over $100 billion. Many of them are industrial companies. So I think we're well aware that there are consolidation opportunities within that market, but even for companies that are less than $100 billion, there are actually hundreds of companies that are over $5 billion or $10 billion, and those companies have huge consolidation opportunities.
