Confronting Cathie Wood About Her Fund’s 70% Decline

Shaan Puri

"You manage more money than any other woman on Earth." </FormattedResponse>

Cathie Wood

Across the company, we're closing in on 40,000,000,000 (40 billion).

Shaan Puri

She's called one of the most **disruptive and innovative forces**.

Cathie Wood

**Gaffey Wood** is making some big headlines.

Shaan Puri

"The **ARK Innovation ETF** soared over the early pandemic. If I'm a believer in **AI**, what's the number-one stock that I should own?"

Cathie Wood

I think everyone knows about **Nvidia**. We always try to answer that question with stocks — people are not thinking about it the right way.

Shaan Puri

**"So here's the tough question: if somebody else had your track record, would you invest in them?"** Well, Kathy Wood — you're here. I appreciate you doing this. You're a pretty remarkable person. I've been watching you for a long time, and there's a good chance that you manage more money than any other woman on earth as an active fund manager. I don't know if that's exactly true, but you may be top five.

Cathie Wood

Yeah, probably. I don't know — I don't know myself. *I don't... I don't have those numbers.*

Shaan Puri

"Yeah, I'm curious, actually. What's the humble origin? So, what was **Kathy Wood's first job** — **McDonald's cashier**? What were you doing, burgers?"

Cathie Wood

No, I wasn't. I was at the register. I was 16. I also worked at a supermarket. I was the first girl allowed to push in carts at Vaughan Supermarket in Southern California.

Shaan Puri

Do you remember roughly what you were making hourly when you worked at McDonald's?

Cathie Wood

Gosh—I know. Well, right before that, I was babysitting for a quarter of an hour [15 minutes]. </FormattedResponse>

Shaan Puri

So, you went from maybe a quarter an hour to managing something like $2,030,000,000,000 in a fund. I think this is interesting. The reason I ask is because, in the world of entrepreneurship, we always hear these "hustle" stories. I don't think you go from McDonald's to, you know, the top where you're at without hustle. So what's the **hustle story** you pride yourself on?

Cathie Wood

Well, the first big break was getting into the business: **Art Laffer**. I'm not sure if you know Laffer — *Laffer Curve*, supply-side economics, Reaganomics. He was my professor at the University of Southern California.

Shaan Puri

"He was an adviser to presidents, right?"

Cathie Wood

Oh — every president since Richard Nixon, except for Presidents Obama and Biden. He was agnostic; it didn't matter what party you were from, people wanted to hear what he had to say about taxes, deregulation, and monetary policy. He wanted to give his point of view. We've come full circle. Art and I — because my team and I introduced Art to Bitcoin in 2015 — when he read our paper he said: > "This is what I've been waiting for since the U.S. closed the gold window in 1971: a global, rules-based monetary system, [based on the] quantity theory of money, limited to 21,000,000 units." But we'll get there. And of course he was talking about stablecoins. So now we have introduced him to stablecoins — Tether, Circle, and so forth — and he said the "right rule" [ending unclear].

Shaan Puri

Have you seen this website **"WTF Happened in 1971"**? It's amazing. There's an entire site basically asking, "What the f happened in 1971?" It shows a series of charts indicating that something changed in 1971 and the world was never really the same. It's a very compelling case and it makes you want to go look at it. Obviously, I think that's the year we went off the gold standard, right?

Cathie Wood

Yeah, it’s the year we went off the **gold standard**, and all hell broke loose in monetary policy. We went into massive inflation. So anyway, it was in the late seventies that, while I was in his class, Art introduced me to **Capital Group**. I walked into Capital Group; I didn’t even know what the investment business was. I had been a waitress. I was interested in economics, but I didn't know this business, and Capital was the premier firm in Southern California at the time.

Shaan Puri

Sounds like that might be a tough job to get.

Cathie Wood

Art recommended me highly to Don Conlon, who was the chief economist of Capital Group. I walked in there, and Don was losing a person who was going to Harvard Business School. This woman—her name was Claudia Huntington—was so good at what she did that he was looking for *one and a half* people to replace her. I was the half, but I didn't want to be the half. I wanted to be the one and a half.

Shaan Puri

So let me ask you a question about that, because I think everybody in their career will have an opportunity. I had one when I moved to San Francisco when I was 24. I didn't know anybody, but I wanted to be an entrepreneur. I wanted to be in Silicon Valley. This billionaire was hiring for a role—I don't know how I got the job. They literally told me, "You're not qualified for this, but we like you. We'll bring you on. We'll still hire somebody else qualified for that role, but we want you here anyway." So I had my foot in the door, and I think everybody has this opportunity to work hard. There's one thing to put in hours. I think there's a lesson in *"first one to be there, last one to leave"*—the sheer number of hours. But what else goes into making an impression during that *sprint phase* of your career, when you can fully go full force? What else, besides sitting in the chair for a lot of hours, matters? Do you think—what's the mindset?

Cathie Wood

Sitting in the chair maybe matters, but I think the most important thing is: my **objective** was to bring new technology into the firm. I was using an economics **time‑sharing** system — we're back in time‑sharing — all the charts that you just brought up, boom, boom, boom. Back then, each one would have cost, in today's dollars, **$5,000 to $10,000**. That gives you a sense of how far we've come. Sparingly, I was able to use charts — some we made up, originals — and then call on people we trusted. I really developed little economic books and presentations for Don to use.

Shaan Puri

Yeah. You'll get what you want when you help other people get what they want. So the fastest way to getting what you want is to give other people what they want. I like what you're pointing out: as a young person you're coming in without the experience, without the network, and without—maybe—the track record or any of those things. Those are your disadvantages. But maybe your advantage is *tech*. New things might be easier for you to pick up because you have time, and maybe you grew up with those tools and you're less set in old ways. So you bring something to the table, and that can be your thing. Hey, real quick—our sponsor for today, **HubSpot**, actually did something pretty cool. If you like money stuff and investing wisdom from people like **Warren Buffett** or **Mohnish Pabrai**, they put together a nine investment-principles document. There's a free document you can download of frameworks that they shared when they came on the podcast. You can get it right now—it's basically a mental model that separates, I guess, the elite investors from the average investors. [Scan the QR code or click the link in the description to get it.] Alright, let me get back to the episode. I'm just curious: what does a day in the life of **Kathy Wood** look like? What's your actual day-to-day main thing that you focus on?

Cathie Wood

I hold sacred the time from the moment I get up in the morning until 10:30. That time is all about **research**. We have our research meeting from **9:00 a.m. to 10:30 a.m.** The first half of it is the entire research team together with the investment and portfolio management teams, really sharing information. In the last half hour we focus on one of four teams. We're broken up into: - the **Autonomous Technology and Robotics** team; - **AI and Cloud**, which has forked another team: **Consumer Internet and Fintech**; - our **Multi-omics** team, which is really all about life sciences and how profoundly AI is going to transform health care — I think that's the most inefficiently priced part of the market; - and our **Blockchain Technology** team. On **Fridays at 10:30**, we have a **brainstorm**. All our teams come together (or stay together), and we invite another — I'm going to say — 40 people who have followed us over the years and are passionate about innovation. These are venture capitalists, entrepreneurs, retired engineers, retired professors, and people teaching in universities today. They are very vocal. We want to get out of the "not invented here" mentality. We really want pushback. Many of these people invest more for their personal accounts [personal accounts], but we're all trying to figure out how the world is going to work. We try to push the frontiers of knowledge forward as fast as we can, anticipate what the next set of topics will be, and figure out where we should position ourselves.

Shaan Puri

That's pretty interesting. Is that common? Do other firms do this kind of "Friday open-door brainstorm" with external folks? That sounds pretty unique.

Cathie Wood

No, they don't. I've done this since 2001, when I was at my last firm. I just thought it was really important not to get stuck in our own research, but to have it *battle-tested*. We took that to another level when I founded Arc with this notion that "we're gonna give our research away" — not when it's finished, because it's never finished, but as it is evolving and we push it out. At the time, 2014, Twitter was for tweens, teens, and celebrities, right? So I didn't think that was going to be our primary social network. We thought maybe LinkedIn would be. Instead, X has become the most important social network, even for crypto. I thought Telegram was where all of that was going to live. There are all kinds of conversations, but the ones that we need — and that I need to see — are on X. Sometimes we stir the pot with our research and get debates going. I feel that the world is moving so quickly today; it's not like it was in 1977. Back in 1977, as I described, it was really expensive to get information and to travel places to pull information from management. Research departments, like the one at Capital, were closed, and that was their secret sauce. Today, information is ubiquitous; it is all over the place. In fact, you have to figure out: is it real or fake? That requires another skill. So I thought the closed world is probably not where we are best suited for what we want to do, and that is to focus exclusively on *technologically enabled disruptive innovation*. That's all we want to do. There's so much information out there, and we knew we could harness it. It's how you put it together and what you place priorities on — in terms of the kind of information and the assumptions you're making — that becomes more important.

Shaan Puri

And you—*this might be a dumb question*—when you go on TV and say, "I think Tesla's going to $2,000 a share" (or whatever your target price is), everyone says, "Oh my gosh, that's really bullish." You explain: "Here's why we believe... here's what we know... here's what we believe the future looks like," and you add that you hold Tesla and hope it all comes true. But you're very active—you buy and sell Tesla all the time. I looked at the last 24 hours: your firm made about 20 trades, moving millions of dollars in and out of these positions. If you believe Tesla is going to, you know, $2,000 a share, **why don't you just buy it and hold?** What is all the active trading for? Are you day trading? I'm not from the investor world—I'm trying to understand.

Cathie Wood

Yeah.

Shaan Puri

"You know, you have sort of the **Buffett mentality**, and then... you have—you're very, very active. I don't really get that."

Cathie Wood

Yeah, that's another great question. I know it must seem confusing. We often describe ourselves — few people believe this, but we believe it — as a *deep-value manager*, like Warren Buffett. If you give us five years... Warren Buffett was the first to admit, "I don't invest in technology." He made a few good ones: Apple was great; IBM, not so. But he knew where his strengths were — or he knows where his strengths are. He's still with us.

Shaan Puri

Mhmm.

Cathie Wood

And he did not feel that technology was where he had an edge. That's where we do have our edge, so you can say we're a great complement to the **Warren Buffett** strategy if you give us a **five-year** investment time horizon. So why do we trade so much? Well, because of what has happened to the markets. Since I got into the business, I think more than **75%** of trading is algorithmic and high-frequency trading. There's a huge amount of volatility in the market itself, but especially in our stocks. If you look at our trading in **Tesla**, we are using the volatility to our advantage. Rarely has Tesla dropped below the number one position in our flagship portfolio, **ARKK**. What has happened is it has gone from $100 to $500 and becomes, you know, **13.14%** of the portfolio. From a portfolio-management view, we are effectively rebalancing — that's a lot of hard work. We know Tesla is a controversial stock; **Elon Musk** is a controversial individual, and we are going to have opportunities at lower prices to move back in. That's the kind of trading you see around our high-conviction stocks.

Shaan Puri

Okay, so let's take what you just said. You said **"give us five years,"** right? Because we're betting on these sort of long-term technology S-curves that we think are playing out. So here's the tough question: over the last ten years you've been making hundreds of millions in fees but haven't outperformed the simple index like **QQQ** [NASDAQ-100 ETF]. Do you think that's a fair criticism?

Cathie Wood

So, can I—can I give you a reset here? I love the question. You're giving me an opportunity to answer a question that I know is on many people's minds, even if they don't ask it. So, thank you. Our objective as a firm is to deliver a minimum **15% compound annual rate of return** over five years. You are absolutely right—we have not done that [over a specific five-year period]. We *have* done that since inception. Since inception, our compound annual rate of return is over **15%**. Now, what happened in the middle there? You're focused on endpoint sensitivity, and I understand why people use five years, ten years—all of that.

Shaan Puri

Sure.

Cathie Wood

If you use 10 years and you look at Morningstar and just their quantitative metrics — which have no human input — they just have their rules-based system based on the benchmark they selected for us. We didn't choose the benchmark; we are **benchmark agnostic**. We are in the 4th percentile of performance for that benchmark. Now, that benchmark is *mid-cap growth*.

Shaan Puri

Right.

Cathie Wood

Which kind of fits because we consider ourselves *all-cap*, but if you average you'll get mid- to mid-ish cap, let's say. So that's good — that's actually saying something. The space we've been in: anything less than large-cap, and especially mega-cap growth in the tech space, has been very tough. Okay, so that's another marker. Now, what about the last five years? Well, we had COVID in 2020, because this is when we blew up. I'm not sure if you know this part of the history, but because we were the only investment firm putting our research out on social media and the only one posting our trades every day, we went viral during COVID. Everyone was sitting in front of their computers trying to figure out what to do with their time — and their extra money, by the way. We were actually one of the few out there teaching people about investing and bringing them along on our journey. In 2020 we were up **150%**, and at the end of that year — remember, we're five years away from that; this is what we're comparing against — I was on Eric Schatzker's show on Bloomberg. It was a holiday show and they gave us a lot of time. One of my main messages was, "hey — keep some powder dry." We know that what goes up like this is going to come down. It's just too much capital chasing the opportunity, perhaps too soon. And that last...?

Cathie Wood

I probably should have said more loudly to myself and to our team. Even though our modeling, stock by stock, got us to a **15% compound annual rate of return over the next five years** — which was very low compared to our normal expectation of **25–40%** — it had dropped because of the appreciation in stocks to 15%. What we did not appreciate enough was the cause. Many people think, "Oh, the interest rate increase — that wasn't as much the problem." The problem was supply-chain bottlenecks. Our models are driven by unit growth, and when there's an interruption in unit growth, our rate-of-return expectations come down. I thought — and we thought — we were going to come out of this crisis in a **V-shaped recovery**, and we did. That was correct. But we didn't catch how long it was going to take supply chains to reorient, and I think that was a big lesson for us. If I had focused on that one variable, I would have said, "Alright, let's move more into larger-cap tech stocks with big cash positions that are innovating." It would have been the *mag six* and all of that. We did not do that. We did own them, because we had started doing that in the bull market. We always diversify as a bull market extends because our stocks tend to go crazy to the upside, so we were already doing that. Then in 2021 those [large-cap] stocks kept going up while our smaller-cap and mid-cap stocks started going down. What we always do is rebalance. We took profits there and we bought — that was just way too soon. It worked out, and I think history will show that everything is fine. We had to have people stick with us. There are so many people who piled in at the top even though we were saying, "Hold your horses," and who left us at the bottom, which is classic. So in this cycle we're going to be out there a lot more saying along the way: **rebalance, sell, take profit**, so that when our strategies go through a weak spot — a sinking spell — you'll have the psychological wherewithal to buy. It's called **rebalancing**, and it's a basic investment concept.

Shaan Puri

Betting against you is like betting against a combination of things I would never want to bet against. It's betting against **AI**, it's betting against **crypto**, it's betting against **innovation**, and it's betting against **Elon Musk**. That's just not who I— you know, that's like the Monstars in *Space Jam*. I'm just not trying to bet against that. You might even be right on any one of those individual things, maybe for a time. It's just not where I would want to be positioned against long term. At the same time, I'm a normal person, and it's pretty crazy. This is true in venture capital, too. I heard this a long time ago and it never left me: "venture capital is a rigged game." You make 2% annually on your fees regardless of whether you make money or lose money. I think what you do is very similar. If you have—let's just use a round number—20 billion in assets across your ETFs, is that about right?

Cathie Wood

Across the company, we're closing in on **40 billion**.

Shaan Puri

Okay, that includes the digital assets, private funds—everything.

Cathie Wood

So, we do have a venture fund, so I know what you're talking about. We're doing ours a little differently: **we don't have a carry**, so that anyone with $500 can get onto the cap tables of SpaceX, OpenAI, Neuralink, and so forth.

Shaan Puri

"You don't have carry, so how do you make money in that, just...?"

Cathie Wood

On fees, what we do is we have a high fee — I think it's **2.75%**. What we did to arrive there was ask: what do the best venture capital firms in the world deliver over time in terms of compound annual rate of return for their clients, and how much of the benefit do they derive? The best ones may be north of **2.75%** per year on average, especially in this kind of market where AI is just out of sight. But if you do a very long-term historical retrospective, **2.75%** was the landing point. We are offering direct-to-cap-table investments; these are not SPVs [special purpose vehicles]. </FormattedResponse>

Shaan Puri

Right.

Cathie Wood

"Not an **SPV**, so there are no fees—or *palm fees upon fees*." [unclear phrase: "palm fees upon fees"]

Shaan Puri

Right. I think the challenge is basically on $20 or $40 billion in total assets: there's a guarantee. This is why **finance and fund management** is one of the best businesses in the world. You get hundreds of millions in fees guaranteed regardless of whether you're up or down. And then, the more you grow, maybe you have additional *carry*; there are other things in venture capital that you benefit from. So I think that's the challenge, right? Like Munger used to say, "Show me the incentive; show me the outcome." I think all finance and fund management is generally suited towards growing assets under management — we make money either way — and then try to do your best in terms of performance. In the long run you will be judged on performance, but in the short run it's hard to tell what's working and what's not. Which is why, when Buffett, I think, started, he basically said, "I'll take nothing for the first 6%," which I think was kind of the index standard at the time. He said, "But above, if I beat the market, then I want 25% of profits." I thought that was a great structure. I think the world of finance moved away from that because why would you not take the guaranteed fees? If you can take the guaranteed fees, you're going to take them. I would too.

Cathie Wood

Well, you know what's interesting — from the eighties on, when I saw hedge fund structures and venture capital, I said, *as an economist*, "Oh, that game's gonna end." Those kinds of excesses — excessive returns, shall we say — they go away with competition. But in the venture world there is a huge amount of competition. If you look at where the real money is made, it's in the **top 10**. The **top 10** is where a disproportionate amount of the returns are. Of course that's what we're aspiring to, and of course everyone is aspiring to it. But there's some kind of **network effect**, and I think the network effect is not a viral app — it is the community.

Shaan Puri

Well, venture has one different property than what you do outside of your venture stuff, which is: in startups, it's the only asset class where **the security selects the investor**. So, you know, yes—for Buffett or any public stock market—I get to just pick what I want to be in, and I push a button: I'm in the stock. Whereas in venture, the hot startups want to be with the hot funds, and only the hot funds get to be on the cap table. So **the security selects the investor**, not just the investor selecting the security. It has this... that's where the **network effect** comes in; that's where the **brand effects** come in. That's why Sequoia and Benchmark and these other guys will keep showing up at the top: if I'm one of the top startups, I want them. So yes, they get the access. Even if another investor was totally right in their thesis, they just can't get them to capture.

Cathie Wood

It's a self-selection. Yes, there is self-selection you're seeing in the hedge fund world. Big changes, though, in that world — the fee structure is changing because passive indexes were outperforming active. It was a self-fulfilling prophecy because the pendulum was swinging. I believe that pendulum swing — I think that, and *consider the source* — the final swoosh in that direction was in the last few years toward the **MAG Six**. One of the reasons they're such concentrated parts of the market now is: are they all going to benefit from all of these new technologies? Our focus is on robotics, energy storage, AI, blockchain technology, and multi-omics. Some of them will. Apple — we've been watching them for a long time; finally it's out. They don't know what they're doing in AI now. I think they're scrambling a bit, so we'll see what happens. Each one of them has a weakness. Each of the **MAG Six** has a weak spot. Sure, they'll participate in the wave, but they also have weaknesses caused by the disruptions associated with these new ways of doing things. I think we're at the beginning of that pendulum swing in the other direction. As I just said, *consider the source.* That would be great for us because we don't own the **MAG Six** in our top 10. It's not like we won't own them, but for the most part we don't own them in the top 10.

Shaan Puri

"If I'm a believer in **AI**, what's the number one stock that I should own to benefit from the oncoming **AI** wave?" </FormattedResponse>

Cathie Wood

Well, I think everyone knows about **Nvidia**. We always try to answer that question with stocks. People either don't know, or they're not quite thinking about them in the right way. </FormattedResponse>

Shaan Puri

Yeah. Misunderstood. Maybe—maybe not. Unknown, but *misunderstood or mispriced*. If... if you...

Cathie Wood

So yes — as we were selling **Nvidia**, we got all kinds of flack. Nobody bothered to notice that we put it in the portfolio in 2014 because of autonomous driving, at, I think, **$0.20 per share** on the current stock basis. We held it for years and no one would listen to us. I talked about robotics, talked about autonomous driving — nope. It was a PC gaming chip company and that's all it was. Then it explodes with ChatGPT. We started selling it, and we sold it too soon in the flagship — I mean, we exited it. We're back in it now when it dropped during tariff turmoil. But in portfolio management, you have to not look at what was sold; you have to look at what you did with the proceeds. How about **Palantir**, which I think, from that, has done better than **Nvidia** — I don't know, that was the case at one point. How about **Coinbase** when the SEC was suing it? That's one of the companies we used some of the Nvidia proceeds for. It has done pretty darn well — I think almost as well as Nvidia. So today, of course Nvidia still has a very important role. Palantir still has a very important role — it is the premier Platform-as-a-Service company. We think **embodied AI** is underappreciated. What is embodied AI? It is physical AI — the physical and digital worlds meeting. And you know what I'm going to say next: **Tesla** is the largest AI project on Earth, and it's not just robotaxis anymore. It is humanoid robots. According to our research, the robotaxi opportunity globally — for everyone, including China — is an **$8–$10 trillion** revenue opportunity in the next 5–10 years, up from maybe **$1 billion** now. So think about that: from $1 billion to $8–$10 trillion. The whole ecosystem, with platform companies like Tesla getting half of that, is **$4–$5 trillion** — that's a big market. According to our estimates, the humanoid robot market will be a **$26 trillion** market in the next, I'll say, **7–15 years**.

Shaan Puri

"I wanted to ask you about this because you put out this great deck—Arc put out a great deck—and I love this slide. If you're on YouTube you'll be able to see this. If you're on audio, sorry—go to YouTube or Spotify and check this out. On this slide (I'll just describe it), it's basically the **cost per mile**: how much it costs to transport a human one mile. You started in the 1800s with horse and carriage. Adjusted for inflation, it looks like it's **$2.10** per mile then. Then you get to the Henry Ford era and you're at **$1.10**, and for almost a hundred years it's been roughly the same—about **$1.10** per mile. Then your estimate is that with electric self-driving cars, where you don't have a driver, the cost per mile could drop to **$0.25**—so about four times cheaper than what it has cost for the last hundred years. Did I summarize your slide correctly?"

Cathie Wood

That is correct. That is correct. And, you know, when we first did this research we, too, were astonished — *wait a minute*, it cost the same, **inflation-adjusted**. One of the reasons for that is because the automobile matured fairly quickly, right? We're all about **Wright's Law**. Wright's Law tries to understand: okay, you've got this new technology and you're starting from a low base. For every cumulative doubling in that base — so from one to two, two to four, four to eight — for each cumulative doubling costs decline at a consistent percentage rate for each technology. Well, the internal combustion engine is mature, and so it has no shot against EVs, even though I know that's not the prevailing wisdom in this political climate. I'm just using economics and learning curves — so, technology...

Shaan Puri

Sorry, what do you mean by "it has no shot"? Do you mean "no shot" in what sense — the cost comparison, or just... no?

Cathie Wood

Because of the chart you just showed, you can't get that cost down any lower. There are no more cumulative doublings — everybody's got one, you know. It's a bit of an exaggeration. In the emerging markets they don't, but they're not going to be paying up for internal [internal combustion engines]. They're going to be looking for the cheapest solutions for cars, and those are going to be **electric**.

Shaan Puri

And the part I didn't get was this: okay, great — the cost is going to go down because it's a self‑driving electric vehicle. I get that. I can see why the cost goes down, and I assume when the cost goes down, demand goes up. It's cheaper to travel, more people will travel, and it will be selected over other, more expensive ways to travel. But the estimate you have for the **cyber taxi revenue** — I think your autonomous revenue is sort of in the order of **10 trillion** globally? Is that what you said?

Cathie Wood

Yeah, yeah—globally.

Shaan Puri

Right now, if I just take Uber, Lyft, DoorDash — kind of the revenue of all those companies. Today, I would say ride sharing is not a new idea; it's pretty prevalent. I think Uber's at $40,000,000,000 ($40 billion). You add Lyft — that's another $6,000,000,000 ($6 billion) — and then DoorDash does about $10,000,000,000 ($10 billion). So the total of all three of those companies is only in the like $5,060,000,000,000 range [note: $40,000,000,000 + $6,000,000,000 + $10,000,000,000 = $56,000,000,000]. But you're saying, right, that the...

Cathie Wood

But that is even different from what we're talking about here. They are not autonomous and they are not in the pole position. I mean, **DoorDash** will harness autonomous [vehicles]. That's a very interesting one, because we think delivery — especially with drones, rolling robots, and everything — is a very interesting use case. But **Uber** and **Lyft** are not in the pole position for this new world.

Shaan Puri

Right, right. But I guess what I'm saying is that's what's spent today on taking rides from a ride—like a *"push-a-button, get-a-ride"* service.

Cathie Wood

"Oh, I see what you're..."

Shaan Puri

"Why is **self-driving** going to generate 20 times more revenue? Why is it going to be 10 trillion when all of those add up to 60 billion?"

Cathie Wood

Right. What we're doing is moving from a very narrow subset of transportation called **ride-hail** today to *all* of transportation. We're moving the entire market to **autonomous**. To get to that number, ride-hail is a very small slice—very, very, very small slice. In fact, what's so interesting in San Francisco: research we're finding shows that people are willing to wait longer and pay more for a **Waymo** ride than for an **Uber** or **Lyft**. I believe this has already happened. The number of miles Waymo is driving per day in the San Francisco metropolitan area has surpassed Lyft and is heading for Uber, even though Waymo is **geofenced** and Lyft is not. Isn't that remarkable? People are willing to pay up. Now, that's not in our **$8–$10 trillion** estimate. We assume they'll start maybe at or below the prevailing prices for Uber and Lyft, but they will drop over time to **$0.25 per mile** at scale. So they might start in the ~$2 range—at surge pricing it can be $8 per mile—starting around $2, $2.50 maybe, and dropping to $0.25. $0.25 is *at scale*. So that's the $8–$10 trillion. And you know, just think about it: I would prefer to take an Uber today even though I have two Teslas and I love them, but I still have to pay some attention on the road. </FormattedResponse>

Shaan Puri

Right. I'm curious: how much of Tesla's market cap—**I think Tesla's $1.3 or $1.4 trillion**—is Elon? Meaning, if I took Elon off the company, if Elon went to sleep for the next twenty years and we weren't going to have Elon running the company, would you keep your position the same way? And how— I guess just a pie chart, right—of that $1.3 trillion (or $1.4 trillion), what do you think that number goes to if there's no Elon?

Cathie Wood

Well, if you had asked the question five years ago, the answer would have been different. But I think what has happened — and one of the reasons Elon has spent so much time doing other things, some of which people didn't agree with — is because he feels they have pretty much solved the last mile in **FSD**. If they have done that, then they're going to capture the **robo‑taxi** opportunity and they're going to be able to scale. We would not, however, start incorporating humanoid robots in the way we... oh, we haven't done much yet. In our **$2,600 price target** we haven't included much for humanoid [robots]; we'll update that. We usually update it each spring for public consumption. So we have very little for humanoid. We'd probably be much less optimistic on humanoid robots, and so we wouldn't put as much in as we perhaps would with **Elon** at the helm.

Shaan Puri

Right — wonderful. Well, **Kathy**, I appreciate you coming on. It was fun to hear some of your stories. It was good to hear, you know, your take on some of the tougher questions, so I appreciate you doing this.

Cathie Wood

"Yeah, thank you, Sean, and thank you for the tougher questions — they're **important**. Thank you for giving me a platform on which to answer those questions, because it is **important**. It is **important**."

Shaan Puri

Great. Well, thank you. I hope to do it again.