Siddhartha Ahluwalia 1:05

Hi, this is Siddhartha Ahluwalia, your host at Neon Show and also managing partner of Neon Fund that invests in the best of enterprise software companies and AI companies coming out of India. I have today Deepak Garg with me, founder of Rivigo and AnywhereJobs. Deepak, welcome to the Neon Show.

Deepak Garg 1:21

Thank you, Siddhartha.

Siddhartha Ahluwalia 1:22

Thank you for recording the podcast. We are recording today in Dubai in business day. So, a very different location for us to record a podcast.

I have idealized you like over a large part of my entrepreneurship journey and the way that you built the relay system at Rivigo like was truly inspirational, like how many truckers’ drives got enhanced because of that. I think like it was the first time in India’s history that trucker was sleeping for eight hours, getting decent food on the road and well taken care of, right, during Rivigo time. So, I think it was hailed as a massive change, right.

So, Deepak, if you have to think about the Rivigo journey, what went right, what went wrong, I would love to hear your thoughts on it.

Deepak Garg 2:17

So, thank you again for having me here. You know, I have reflected a lot on Rivigo over the last many years. I think the idea itself, the relay as an idea, it was the first time, you know, anyone attempted that in India.

Of course, it is now being attempted in Europe and many other places, but in India, it was the first time it was attempted. There were a lot of naysayers. There’s still a lot of naysayers.

I believe in the idea. I believe it’s a solid idea. It needs certain ecosystem conditions to work well, right, and India is getting there.

I think we were a the market was not there. I think in the first few years, we saw a lot of success because e-commerce was still building up and was shipping goods through air cargo mode. We brought them on road, built a solid network for them, and through that, our unit economics was also working hard, but the moment we started to go into traditional sectors, we realized that, you know, we are, I think the economics of the model was not as great as it was in the express segment.

So, I would, I often say when I meet entrepreneurs, I look at the market size with a little bit of skepticism, and typically in India, what I’ve seen is the market size is smaller than what you think it is. Right? So, that was one thing. I think we grew very fast.

So, we outgrew the market, which you’re trying to address.

Siddhartha Ahluwalia 4:17

Got it. And what have been your learning on on raising money as a founder? How much would you raise on all those metrics?

Deepak Garg 4:27

Yeah. So, you know, Rivigo is very fortunate, you know, early on raising a lot of capital. And, you know, we were, I think, one of the fastest unicorns in a matter of three years.

Siddhartha Ahluwalia 4:42

From start to unicorn was three years.

Deepak Garg 4:44

We started in 2014, 2017, we were a unicorn. Right. So, we went really fast, in terms of, because the idea was clicking, we were getting business, the unit economics as well.

Siddhartha Ahluwalia 4:55

There was product market fit.

Deepak Garg 4:56

Yeah, there was a product market fit on day one. And, you know, we, when we raised Warburg money, we were profitable

my view on capital raising is that capital raising is a double-edged sword, right. It is suitable for certain ideas, it is not suitable for certain ideas.

For example, if there is R&D, innovation, it’s a consumer market with a lot of competition, right. And you have got something cool as an idea. Of course, capital raising, you’re creating a new market, of course, capital raising is required.

But if it is a smaller improvement on the existing business, on the existing market, right, then I think I, you know, I don’t think capital raising is a great idea. And a lot of companies in India raise capital just to sell, just to do sales, right, or invest in sales and marketing. That to me, you know, fundamentally doesn’t fit, seem right.

Now, raising capital to invest in sales and marketing as a profitable, established business from a private equity player is still, I think, is a good idea. But at a seed stage or an early stage of raising capital to just do sales and marketing is, I wouldn’t say, a great idea. So I’m not a big fan of, you know, D2C businesses, for example, raising capital, I’m not a big fan of, so I evaluate ideas like that, right.

I’ve, for example, recently invested in a very interesting company, which is doing AI robots for construction as a segment, right. And to me, they’re trying to do something very, very different, innovative, out of India, great team, it needs capital to build those robots and then sell those, right. Now, to me, that’s a capital-based idea.

If you don’t get capital, you will not be able to build it, right. But if you are like selling on eCommerce or QuickCommerce, right, and then throwing money away to to Amazon or Blinkit or whatever, then it’s not a, I don’t think it’s a capital-based idea. And somewhere, a bootstrapped guy may, you know, do better than you would do.

Siddhartha Ahluwalia 7:57

At least what has been shown in India, a bootstrap founder can make a better financial outcome for himself or herself than a person who has raised capital.

Deepak Garg 8:07

Not just financial outcome, a much more solid company. And look, at the end of the day, there’s only limited amount of innovation, or first principle thinking a business has to do. That’s a core team, 10, 20, 30, 40, 50 people depending on the size of the company, right.

Everyone else has to just execute and follow through. And right now, that’s something which we learned over time, right. And and I wish I had that reflection earlier.

Siddhartha Ahluwalia 8:57

So you’re saying that it has resulted in a journey of unlearning and relearning for you.

Deepak Garg 9:04

You know, I think I’m a very good entrepreneur. I can spot the white space in the market. I can build a profitable business.

I’m good at sales. But I had to unlearn a lot of things I learned at McKinsey, right. I’d spent too long at McKinsey.

I had a great run at McKinsey. I loved my journey. I learned a lot there.

But I had to unlearn a lot of that. Right. So if I look at myself now, I know why Indian, successful Indian entrepreneurs do things in a certain way.

Siddhartha Ahluwalia 9:44

And what are those ways if you have to?

Deepak Garg 9:45

For example, how do you build a team? Yeah. You know, I think Mukesh Ambani had this quote or saying, you know, like, you really have to find those 10% gems in your team out of 10, you know, like out of 100, 10 of those guys have to be really bleeding, right.

And then 70% will be your loyal soldiers. So I think that’s number one. I think how do you build a team?

How do you build a culture? The culture has to be, there was a saying we had written, we have to be accurate and not kind, because at the end of the day, nature is accurate and not kind, right. But I’ve changed, you know, we have to, it’s a very different world when you’re running a company.

So kindness is important. Accuracy alone doesn’t work, right. So we used to, we used to have these reviews, we would remind ourselves, be accurate and not kind when you’re reviewing someone.

So I think there was a lot of those, how do you build a culture of trust and loyalty? How do you build a culture of longevity in the team? How do you build a culture of collaboration and this thing?

How do you hire people who will not just do well now, but you can give them a growth path for the next 5, 10, 15 years and therefore have longevity, because for them to go and then you have to bring another guy who will learn and all that, it takes a lot of bandwidth and energy, right, of the organization. So that’s one. Number two, on the business side, I think my learning, particularly my learning was, choose a business, you know, which has, you know, market, which has a market structure with a decent margin, right.

If the market structure does not allow for a decent margin, for example, trucking in India is a very fragmented market structure, right. And you’re competing with this very small scale individual trucker, right, in an environment which is not very regulated, right. That cause, that can cause, you know, issues in your, in your economics over time, because there is a dis-economy of scale in that environment, not economy of scale.

Unless you can build technology to the level where, you know, each of your unit can compete with a single owner or a small owner, and that’s very hard to do. So yeah, there’s a, there’s a, overall I came to a conclusion in my life that I have to do more export oriented business. India is not a market to sell, I think, if I’m doing B2B, then I have to be outside.

Siddhartha Ahluwalia 12:17

Do you believe that India as a consumption in B2B is not the best market?

Deepak Garg 12:24

India even as a consumer market is not a great market, right? I mean, people are still building out. Even a lot of companies are like Zomato.

Siddhartha Ahluwalia 12:33

Yeah, you commented about one very interesting post that your mother asked you that should she sell Zomato and you said don’t sell it for another 10 years.

Deepak Garg 12:41

I’m a massive believer in Zomato, right? And because look, Zomato is burning cash now, right? I mean, and is investing in cash, but I think it’s one of the few and probably only I would say consumer company which is still very tightly run and managed in terms of their unit math.

And there’s consumer love, they built a great brand, they’ve got a great team. Right? They’ve got a great team in terms of the technology talent.

And I know some people who went from Rivigo to Zomato, they were the best guys. They have not been carried away. Of course, in the early years of Zomato, of course, they got carried away many times and they were at the, they’ve learned through those failures.

They’ve seen this journey for now, what 15-18 years. So I have this very simple top down view that in 10 years in India, like in other geographies, they will be tech company, tech companies, consumer tech companies in the top five.

Siddhartha Ahluwalia 13:52

They dominate the market cap.

Deepak Garg 13:54

They will be in top five, right? I mean, in the US, top five are all tech companies in China, like that.

Siddhartha Ahluwalia 14:00

And why do you think?

Deepak Garg 14:02

So if I have to pick one company and the top five companies in India will have a market cap above $500 billion, today they have $200 billion. And, you know, like the top company of India will have a trillion dollar market cap. Correct?

I mean, if it’s a $10 trillion economy, let’s say it’s a $10 trillion economy, $10 trillion, $10 or $20 trillion market cap of, you know, there’ll be one company with a $500 billion to a trillion dollar market cap, right? And there’ll be a tech company most likely.

Siddhartha Ahluwalia 14:34

Why is your reasoning that it will be a tech company in a fragmented market like India? In US because economies of scale works, that’s why tech works.

Deepak Garg 14:45

You know, like, in India, so Indian consumer is also coming of age. Consumption in India is only going to grow. There’s a lot of, so what is Zomato?

Zomato is a play on a massive supply of unemployed youth coming into the job age over the next 10 years. It’s also a play on a large base of the pyramid moving up in terms of consumption. So that’s a beautiful play.

I mean, their consumers are going to grow significantly, and they have a continued supply over the next 5, 8, 10 years of a very large supply of, you know, youth who’s coming, you know, will be their kind of delivery boy, right? So these guys will want top of the pyramid, will want top of base of the pyramid, will want convenience. These guys will want job.

You know, Zomato as a platform is giving.

Siddhartha Ahluwalia 15:51

But that’s also true for Swiggy. That is also true for Zepto.

Deepak Garg 15:54

I know, I know. It’s true for Swiggy. It’s true for, look, Zomato has done a few things, right?

Like I said, they’ve invested a lot in the brand. So I think brand wise Zomato has done well. I think they’ve gotten to a point of unit economics, which is far better than many others.

If I look at the cash position of Swiggy versus Zomato today, Zomato has a far stronger balance sheet versus Swiggy. Swiggy has to continuously go to the market to raise money. They will have to go this year to raise money.

And whenever that happens, Zomato will again take market share away. And in a duopoly like that, I mean, you see, if the 15-20 percentage point of market share difference can create a 80% difference in the market cap. So I’m not saying Swiggy will not exist.

Swiggy may exist. But Swiggy may be, again, a very large company, a 50-100 billion dollar company. But Zomato can be a 300, 400, 500 billion dollar company.

Siddhartha Ahluwalia 16:53

And then where does it leave the position for the third player, Zepto?

Deepak Garg 16:57

I don’t know if there is so much space in the market. There could be and there could not be. Zepto could be in other firms, Zepto could choose another market.

I don’t know. I don’t know. But I think amongst the current set of players, and if I look at top down, there’s a space of a tech company to be a very large company in India.

And today, if I have to take a bet, I will take that bet on Zomato and not on anyone else.

Siddhartha Ahluwalia 17:24

So if you have to summarize what is happening globally right now, how would you do that?

Deepak Garg 17:31

Yeah. So look, I started writing about this whole situation actually a couple of years ago when I was not even thinking this deeply. But I was always thinking about cycles.

I’ve been thinking of cycles for the last 10, 12, 15 years. And I’d said, look, there’s this history of the world guides us to a point where the ruling civilization loses its power or empire, falls. There is a fourth turning, and it falls and it gives way to a new empire, right?

It has happened historically many times over from Greeks to Roman, then Roman to, you know, so many other European powers, Spanish and Dutch and, you know, UK. And then it went to America. And then there is a power shift, there is a regime shift, there’s an empire shift on the horizon.

And if you look at those, you know, empires and the eras, typically, there is a 90-year cycle in the 250-year cycle. When in those 90 years, a similar pattern follows. It’s also called the Great Debt Cycle.

Ray Dalio calls it a Great Debt Cycle, where the debt actually continues to kind of go up for the 20 years. And it’s a very similar philosophy, the ruling empire or the world, the regime, they run trade deficits, rake up a lot of debt. There’s a lot of good.. There’s a lot of consumption which happens in that particular geography.

To fund all of that, they have to do a lot of wars, right? The inequality rises because of the monetary inflation or the debasement of the currency. The inequality rises, the rich gets richer, the poor gets poorer.

There’s a revolution, there’s a civil war or the revolution, there are wars with other countries in the form of trade wars or military wars. Then all of this leads to a place where this empire crumbles, right? It happened most recently with the UK, where they became completely stretched with the world wars, right?

And their debt level is very high. They had to take the help of US to…

Siddhartha Ahluwalia 20:19

Did they also print currency during that time?

Deepak Garg 20:22

Of course, everyone did. Everyone did, right? I mean, whether it’s printing currency or devaluing their currency, right?

I mean, Romans, during the Roman civilization, they completely debased their currency. They initially started with silver. So, the dinar, if you look at in the 70 or 75, 78 AD had a certain amount of silver, but it kept diluting till the time it had…

In the last 15-20 years, basically, it had literally… It was debased 95-98%. And it has happened many times over, the monetary inflation.

And that’s the only way to kind of continue to fund deficits, because you continue to inflate away the debt, debase your currency. And so, that’s what is happening now in the US post-1971. So, that has become the big, you know, macro event of the world over the last next 10 years, right?

It has been happening since a while, but it has now come to a point now, everyone like… I had written a post on this some 4-5 years ago, where it said, dollar would be… dollar would vanish, or would not vanish in the sense dollar would not be a global reserve currency, right?

At that one time, I remember a lot of people said, no, no, it can’t happen, dollar is too powerful. But if I say the statement today, a lot of people will agree.

Siddhartha Ahluwalia 22:01

Yeah.

Deepak Garg 22:01

Correct. The change has happened, like, literally within the last…

Siddhartha Ahluwalia 22:07

6 months.

Deepak Garg 22:07

6 months. You’re saying 6 months. I’m saying I wrote, I wrote about this 5 years ago.

So, by 2034, that’s the timeline I have, dollar will no longer be a reserve currency.

Siddhartha Ahluwalia 22:18

So, you’re saying there’s a probability that dollar would fall to like 30-40 rupees?

Deepak Garg 22:23

No, I’m not. No, no, no, no, I’m not saying that. So, there are two different things, dollar as a reserve currency and dollar as a dominant system.

Correct. I’m only saying that dollar as a reserve currency will be not there, you know, in a couple of years, right? In my…

If you ask me, I also like to predict like exact, just for fun sake, right, exactly years or whatever. I said this by 2034, we’ll not have a dollar as a reserve. We may not have Fed, by the way, in 2034.

Now, many people get, how is it possible? We’ve seen the world only through the eyes of a central bank and a Fed, right? But we may not have Fed, we may not have dollar as a reserve. The dollar may still be very dominant, right?

If you look at pound was the major global reserve or the currency, right, before World War II, but it took many decades for the pound to, now it’s still, I don’t know how much part of global trade it is, maybe a couple of percent or something, even lower than that. Dollar is today still more than 50 percent. At peak, I think it was 80 percent, now 60 percent or something.

I don’t have exact numbers, but it may continue to fall as its share of the global trade. But it may still be reasonably dominant as a currency. So I’m not right now commenting about whether it will depreciate or appreciate.

Of course, I mean, if the deficits have to go away, then dollar has to devalue. There’s no doubt about it. Whether it will be 30 or 40, I don’t know, but a dollar will devalue, right?

And typically, any neutral reserve like gold or Bitcoin will be the… It will devalue against that. So you will see gold and Bitcoin going up significantly.

Siddhartha Ahluwalia 24:32

From here also?

Deepak Garg 24:35

Yeah, they have been going up and over 10 years, of course, they will. Because if this whole balancing has to happen, which now everyone is not talking about and US has come to a point where it knows it can’t survive without this balance. They are running a deficit for now.

They’ve come to a point where the interest expense alone is so high. It’s the largest expense on the ballot, on the P&L. It’s now higher than probably the real interest expense is higher than even Social Security and the defense expenditure, et cetera, put together.

So it’s so high that they have to fix things, right? And fixing requires balancing of trade. The balancing can only happen through a neutral currency because currencies also have been manipulated.

Post 1971, when the gold standard was taken away, currencies have been manipulated. So there’s no, none of these Plaza Accords or Mar-a-Lago Accords which one talks about hold because all of this lead to an environment later, which leads to currency manipulation, right? The only way probably it can happen is if there is a neutral, if the country start trading or settling through in a neutral reserve, like a Bitcoin or a gold, right?

And I use both of them in the same way. Many people talk about gold. Many people think of Bitcoin, right?

Bitcoin is still very new. Gold is still, so people are more comfortable with gold, but I think there’s a reasonably strong chance that Bitcoin will have a big say also in addition to gold and people who believe in gold should believe in Bitcoin and people who believe in Bitcoin should believe in gold because both have a very similar property.

Siddhartha Ahluwalia 26:18

Store of value.

Deepak Garg 26:19

Both have a similar property, store of value. I say Bitcoin is a little better than gold. Other than the fact that it’s new, which is, which has an adoption problem.

It’s not as widely adopted as gold because gold has been there for 5,000 years. So people are comfortable with it, has a more familiarity and therefore adoption. Bitcoin is new, is a young asset, is a store of value, but it is a better version of gold because stock to flow ratio of Bitcoin is also, even today, twice that of gold, which means it’s scarcer than gold.

Therefore, it’s a better store of value than gold, right? The problem with gold is when gold becomes $10,000, $100,000, right? I mean, you’ll find so much more gold.

You can keep going deeper. China recently in the last one year has announced so many new reserves, mega reserves of gold. So gold price goes to $10,000, $20,000, $30,000.

You can find more gold. But with Bitcoin, that can’t happen. Today, the gold inflation, gold supply inflation is I think 1.2 or 1.3%. Bitcoin supply inflation today is 0.6%. It’s halving every four years. So the difference between gold and Bitcoin inflation will be 1 by 20 in 10 years. Imagine the amount of value which Bitcoin will… So Bitcoin is more harder as a currency than gold.

Therefore, I think it may have a… And plus, you know, you can settle better. Gold has to move.

You have to have physical vaults, right? Now there’s a news that China will have physical vaults in Saudi Arabia and all that. Bitcoin is…

You can settle between countries in a few minutes. You can, you know, it’s a digital… It’s built for AI in a digital world, right?

I mean, that way. Of course, there are risks to Bitcoin. There’s all quantum risk and all that.

And a lot of people are working to make it quantum resistant. But yeah, overall, my view on macro is that this will happen over the next 10 years. I don’t know which will be the new regime.

Most people think it’ll be China.

Siddhartha Ahluwalia 28:26

Yeah. Because what are the possibilities? Is China…

But all the remaining three countries, Germany, Japan, India are far below. So there’s no chance of any of them rising.

Deepak Garg 28:40

I think today, if you ask anyone, I think it has to be China. So I have this other view, like Ray Dalio has this framework, by the way, where he measures the strength of an economy across multiple parameters. And he compares US and China.

I think if I just look at one element, which will really determine, which could be the next big thing, I think it’ll be energy.

Siddhartha Ahluwalia 29:21

Energy or energy or any form of energy.

Deepak Garg 29:23

Energy production, so China produces today two and a half times of US. It will by 2030 be, I think, three and a half, four times of US, the energy production.

Siddhartha Ahluwalia 29:35

So what also it means is if you study the history of the world in the last 50 years, all the wars that have been like the Vietnam War, the Vietnam War started in 1960s until 1974 was just a war against communism, that US never wanted communism in Southeast Asia. And then each war after it, US didn’t want it either, you know, for some reason, dictatorship. So if that happens, China becomes the dominant player in the world.

Wouldn’t you say the world will be a communist world?

Deepak Garg 30:21

Look, I haven’t, to be honest, reflected on that angle, how the political narrative across the world will change. But a dominant economy and a dominant political system is a different thing, right? It could also be a multipolar world.

But US wants to give away its reserve, US wants to give away the reserve status of dollar and move into a direction where it wants to be a surplus economy. Now, it basically, what is it trying to do? US has studied history, everyone has studied history.

Everyone knows the fall of empire. Everyone knows how they fall. So US is trying to avoid that shock, that fall. So they want to take those corrective actions now to balance and all of that.

But if you go by history, it doesn’t happen that way. So the fall will happen. You know, this transition may happen now.

It can be a multipolar world, it can be China. But energy is going to play a very, very important role, right? Whoever will have energy will be the big winner, right?

Because AI is all power to energy. And if you see, historically, demographics have played a very big role in terms of, you know, whoever has had the best demographics have, you know, played a big role in becoming a dominant economic or a military power, right? But now if you have AI robots and, you know, physical, then the limbs don’t matter anymore, right?

I mean, you have infinite amount of physical labor with artificial intelligence. And if that is the case, then energy will be the only determinant. And China is far ahead on energy.

One of the habits I picked up, by the way, in Dubai was, you know, I was missing this, reading this physical newspaper. So I started reading a Chinese newspaper. I don’t know, it’s an English one.

So it could be propaganda, by the way, right? I mean, it’s an English newspaper. And I was amazed.

It talks about, it would have four or five articles about autonomous vehicles. It would have an article on nuclear energy, how China is making strides in nuclear energy, and how many plants are launching, right? Those news.

It would, of course, have some critical news as well. But there’s a lot of stuff about AI and technology, and how China wants to put now AI in agriculture, how, you know, nuclear energy and renewable energy, how for the first time this year, China’s renewable energy is higher than coal energy. So China is investing a lot in energy.

So if I have to take a bet today, I think it’ll be China. I don’t know how the world will look like when that happens. But yeah, energy is going to play a big role.

Siddhartha Ahluwalia 33:20

We will discuss about the world, right? But what matters at least to both of us is, what’s going to happen to India in the next 10 years, next 20 years? What are your predictions and mental models on that?

Deepak Garg 33:33

Look, India, in general, India will continue to do well. India has been growing at 6-7 percent over the last many years, and continue to do well. So there’s no, like, risk of recession or depression or this thing.

It has got the youngest demographics. It has got a stable political environment, right? No major internal rifts or rifts, right?

And has a mark in technology, has a startup ecosystem going well, has a business ecosystem going well. In general, we are very well positioned to continue to do well. But I am a bit worried about a longer-term view, and I’ve been worried about a few years, right?

I have always felt that unless India grows at 8-9-10 percent year-on-year on real GDP terms, we are doing injustice to our people, to the young people of India who are coming into the job age. So we may get poor, we may get old before we get rich, is the statement I have made many times, okay? Now, it’s been very difficult for India to dial up that 6 percent to 8 percent, because it will take some amount of risk-taking, right?

India has gone to a certain stable environment. So I understand why, you know, we are not risk-taking.

Siddhartha Ahluwalia 35:01

What kind of risk are you talking about?

Deepak Garg 35:04

We’ll have to take some bold measures, which I will just come to. But that to me has been a source of dissatisfaction, that we are not aiming high. We are not aiming 8-9-10 percent, and only that can lead to a meaningful job creation for the masses.

India is producing 2 million young people, are coming into the job age every year, right? And we are not creating enough jobs for them. We are creating 1 million jobs probably, right, by the data.

And therefore, we have to take some measures, some strong measures to support job growth in the short term. Also take measures so that we can take up the 6 percent to 8 percent, 9 percent. And one of the things that is not happening is that we don’t have a very large base of private sector.

Our private sector is very limited. When two large conglomerates pretty much own 80% of the private sector, a large capex comes from them. It’s not a very healthy sign.

So it’s a slow journey of broad-basing the private sector. Our private sector investment is still very, very low. It has not happened because of various reasons.

Risks, interest rates, lower consumption, not enough, not a strong demand growth, right? Plus, first 5-7 years are just spent by this administration just cleaning up the banks and all of that and straining the balance sheet. So I think that private sector and there’s a crowding out of private sector capex that has happened.

So the government capex is doing well. Government has also been fiscally very responsible, you know, and we’ve managed well on the fiscal deficit despite COVID, you know, we’ve controlled that well. But so we have been conservative and I’m rightly so.

You know, we are coming out. We can’t take risk. I mean, the risk can also lead to some other problems.

Maybe the inequality increases, maybe, you know, like we see volatility, right? We can’t afford volatility. So therefore, one of my points, for example, is we should not be a country, we should not worry about tariffs. In fact, we should think about a zero-tariff structure. We should make China also, it has a risk again. I mean, it can wipe off the manufacturing sector here, but also it could have an added advantage.

You could actually use a lot of Chinese low-cost material and also build capability of Chinese quality in India. It’s a risk. That’s what I’m saying.

It’s a bold move, but it’s a risk. Played well, it can go in the right direction. You can build manufacturing capability here, you can use the cheap kind of Chinese, this thing to export out.

A lot of countries are putting tariffs on China and China cannot directly, you know, can you be that front for China? I’m just saying, right?

Siddhartha Ahluwalia 38:09

But China already has a front in Vietnam.

Deepak Garg 38:10

It has, but Vietnam is also getting exposed now, right, in this whole environment, but India is not. So can you use it in a way? Now, it’s a bold and a risky move, right?

But that’s, some people have spoken about it. So I’m not the only one who says it, but I think there is something out there to be done. There’s definitely a much higher investment in energy required.

Siddhartha Ahluwalia 38:38

We are not doing enough.

Deepak Garg 38:39

We are not doing enough. Now, this budget had something about nuclear energy, we’re not doing enough. The amount of, China is building 10 plants every year.

Siddhartha Ahluwalia 38:49

10 nuclear plants?

Deepak Garg 38:50

10 nuclear plants every year. And they’ve been doing it consistently for the last four years. So by 2030, they’re going to double their existing nuclear capacity, right?

So we’re not doing enough on nuclear energy, we’re not doing enough on energy. That’s a risk. Because at the end of the day, AI and this whole world of robots is going to be about energy.

The risk, the long term risk I have is, we have been priding ourselves on this demographic dividend and the factory of the world. What if the factory of the world is an AI robot factory? Then what do we do?

Run by energy and energy is always US and China, then that’s a risk. That’s a long term risk I have, I foresee. So short term will do well, the status will take, you know, will be advantageous, probably to India, the way the way the deal will be structured.

Because China may lose out a little bit, India may benefit a little bit, right? All that Atma Nirbhar Bharat finally may materialize into something. Companies like Apple will make more iPhones, more companies may.

Now, the US is made it clear that they want to have a balance with China. So all the companies of the US will find another place, right? And we’ll find another place.

And India is, and the fronts of China, which are which have been Vietnam and Mexico have been exposed. So India may be a, may be a more neutral front, may get some leeway, may be able to, you know, attract a lot of industry. So India will benefit in the short term, oil is lower, rupee is appreciating.

So your deficit will fall, you have been fiscally very responsible. India holds, Indian households hold own the largest amount of gold in the world, 25,000 to 30,000 tons. The US owns 8,000 tons, you’re four times richer than probably the US.

And if we go to a neutral reserve and dollar continues to go up like this, which a lot of people are saying, then, then we add a lot of financial buffer. And this, we’ve household wealth has gone up by a trillion dollar last, the last one year alone. Imagine if gold becomes $10,000, right?

So India will have a lot of bandwidth in India for that, for, you know, credit growth and for overall the economy growth. So, so a lot of positives for India over the next few years. The big risk is, you know, what’s our place in the world, in this new world where AI is going to be such an important, important force.

Siddhartha Ahluwalia 41:42

So, you’ve also mentioned that, you know, Trump might get a Nobel Peace Prize in 2025.

Deepak Garg 41:49

I think it’s a certainty.

Siddhartha Ahluwalia 41:51

It’s a certainty now.

Deepak Garg 41:52

Yeah, I mean, look, I mean, he’s taking credit of the India-Pak ceasefire, Ukraine-Russia war at some point will stop. And, you know, I predicted last October, that will stop in May. So I’m still holding on to it.

Although half of May has gone. So I’m very keenly looking at this Thursday meeting and most likely, I think it will stop. So if both of these wars stop, then he should, right?

I mean, US presidents have gotten Nobel Prize, Peace Prize in the past for much less. And I also take this example, I’ve said this that, you know, life moves in cycle and the cycle of US is like the cycle of US from 1895 to 1914. I’ve written a few articles on that.

And in that, if you look at this presidency of Trump, although he gets inspired more by McKinley, this presidency is more similar to Teddy Roosevelt. I wrote it when he won. And Teddy Roosevelt won a Nobel Prize for mediating the Russian-Japan war.

And he was also nominated in the fourth or the fifth time. And Trump is also getting nominated in the fourth or the fifth time. A lot of similarities.

He also got shot and was saved. So there’s a lot of similarity, right? And therefore, I, you see the mental models, right?

I mean, you see, you see the psychology, you see the where it is, you see the history and you marry the two. And I think I have this conviction that he’ll get the Peace Prize either in 2025 or 2026.

Siddhartha Ahluwalia 43:25

And why did you make a prediction that Tesla will be the most valuable company in the world in the coming years?

Deepak Garg 43:35

So, you know, multiple reasons again. But look, I think the business reason is very simple that Tesla is attacking some of the markets which are very, very large. Right?

It is right now being seen as a car company, but it is not a car company. It is 50% of Tesla’s profit actually, over the last few quarters have been from the energy business. Not many people know this, you still think of it as a car company.

Number two, when the cyber cab launches, hopefully in June, now Elon Musk is also known for missing deadlines. But I think this time, the June deadline, the June timeline for Austin launches is seemingly, you know, possible. That will be a big event in Tesla’s journey and the stock price, because that will show the world the power of FSD.

Now, a lot of people think China will do FSD and all of that. China is actually behind, much behind Tesla. Everyone is much way more, way behind Tesla in terms of the real FSD. If you follow this..

Siddhartha Ahluwalia 44:51

For our listeners, what is FSD?

Deepak Garg 44:54

Fully self-driving. So, Tesla is far ahead in terms of the technology. Tesla chose the difficult path.

They did not use LIDARs. They use a normal kind of camera. They used a lot of cheap, cheaper hardware, easy to manufacture, easy to scale systems to build it because there was always a vision to make it accessible to people.

Waymo used it. Waymo made a more expensive vehicle, can’t be mass produced at scale, although they are doing very well. So Tesla is someone, so Cybercab itself, the economics is amazing.

And then if this company could solve for FSD, fully autonomous vehicles, then Optimus is only like a few quarters away. And if Optimus gets solved, then you see the function which a car is doing can be done in every part of your life. So you will have a personal robot and maybe a couple of them.

And 8 billion people, probably a billion of them will afford a couple of billion, couple of robots. So there’s a couple of billion robots that can come over the next 10, 15 years, depends on how fast it scales. It’s the largest.

And it doesn’t stop here, right? And it’s a DNA of the company that is continuing to innovate, which has the best physical AI. It will be applied to every sector in the world.

And if you look at now Elon Musk, he’s got a great marketing engine in terms of X. He’s got XAI, which is the best AI company. Someone would build a 100,000 GPU cluster in 19 days, and it will only increase the size of the cluster.

At some point in time, XAI will have clusters which are a million GPUs and 2 million GPUs.

Siddhartha Ahluwalia 46:54

Bigger than OpenAI.

Deepak Garg 46:57

Much bigger than OpenAI, right? A million GPUs and 2 million GPUs, right? And yesterday, he tweeted that he’s thinking of ideas, a project on, I don’t know, what scale of energy level, which is almost the level of energy which US produces today.

The entire energy. He’s thinking of a cluster which will have that level of energy. So think of someone who knows AI very well, someone who knows manufacturing very well, someone who knows AI very well, someone who knows manufacturing very well, and someone who has the best marketing platform in the world.

Siddhartha Ahluwalia 47:34

So combining…

Deepak Garg 47:34

If you combine those inputs, it will be the largest. And most logically, it will be the largest.

Siddhartha Ahluwalia 47:40

So you’re saying it’s a possibility it can become a 4-5 trillion dollar company?

Deepak Garg 47:44

It’s a possibility it can become a 30 trillion dollar.

Siddhartha Ahluwalia 47:46

Wow. The stock can do 30x from here, at least.

Deepak Garg 47:51

I think so. In 10 years. For him, you know, Tesla as a car is not interesting anymore.

I mean, he’s thinking of Cybercap, he’s thinking of Optimus, he’s thinking about XAI, he’s thinking about a million GPU cluster, he’s thinking far, far, he’s thinking of discard the shift scale too, right? The energy level is harnessing, how do you harness the nuclear fusion energy of the sun and make more energy for the planet and so on and so forth. So I mean, there’s a possibility that it becomes the largest.

I mean, it’s only well-deserved that it becomes the largest company on the planet.

Siddhartha Ahluwalia 48:30

And much, much, much larger scale than the second company or third company.

Deepak Garg 48:36

Yeah, there’s no comparison.

Siddhartha Ahluwalia 48:38

What are the other things that you see in the world happening on a macro level?

Deepak Garg 48:44

I think we are going through a very interesting time.

Siddhartha Ahluwalia 48:46

You have mentioned a very interesting term, which is the biggest wealth transfer in human history so far. Why?

Deepak Garg 48:54

Yeah, so look, every 90 years or so, there’s a big wealth transfer happening. And today, because of where we are as an economy, world economy, it’s going to be the biggest wealth transfer that will happen, right?

Siddhartha Ahluwalia 49:09

From whom to whom?

Deepak Garg 49:11

So the biggest wealth, so the wealth will get transferred from, so today, who has the wealth? The wealth is with Wall Street, with the Wall Street, with, there’s a lot of inequality. Correct, right?

The moment we move to a neutral reserve, more something like gold or Bitcoin.

Siddhartha Ahluwalia 49:43

It’s a very interesting point, because Wall Street is feeling itself powerless in the current regime in the US, because they’re not able to influence it anymore. And they are saying that tech is able to influence the current regime on a much, much higher magnitude than Wall Street is feeling like.

Deepak Garg 49:59

So the biggest wealth transfer will be from, probably from Wall Street to Main Street. Like who owns gold? Indian households.

Who owns Bitcoin? American, you know

Siddhartha Ahluwalia 50:13

Main Street.

Deepak Garg 50:14

Main Street, not, no, no, people have, people mistake it.

Bitcoin or crypto is owned by retail, like 50 million Americans own. Wall Street has just entered, by the way, Bitcoin. Main Street owns crypto.

Gold is owned by households. Governments don’t own enough gold. Chinese households own gold.

Indian households own gold. Indian government has how much gold? Thousand, 2000 tons, something like that.

My point is, this is the, this is a big thing happening. The other big thing that will happen is, there are people who believe, who will continue to believe in the past, who will not foresee this change. There are people who will foresee this change, this next 10 years.

A lot of things are happening. AI is happening. A new monetary system is emerging.

Right. Energy is becoming a dominant currency. Right.

Our demographics are shifting. World is aging and, you know, India is, these are four or five major themes that are happening in the world. People who play on these themes will make a lot of wealth.

And people who are stuck in the past will continue to, you know, will lose value. Correct. So there’s a, that’s what I’m saying.

There’s a, there’s a big, biggest wealth transfer that will happen in the next 10 years.

Siddhartha Ahluwalia 51:40

I think technology revolution has always been a big wealth transfer, right?

Deepak Garg 51:45

It is, it’s still going to be, right. AI is going to completely transform what’s going to happen over the next 10 years.

Deepak Garg 52:06

And AI is advancing so rapidly, so rapidly that we can’t even, we don’t even know what’s going to happen in the next 10 years. And that’s also one of my worries about India, when I said, right, in the AI world, we are in an exponential time.

Siddhartha Ahluwalia 52:24

We are lagging behind.

Deepak Garg 52:27

So in AI world, 10 years could mean one century or two centuries.

Siddhartha Ahluwalia 52:32

Yeah.

Deepak Garg 52:33

So if China and US are far ahead in the AI world and India is not, then.

Siddhartha Ahluwalia 52:39

We need to create our own giants and it can’t be Reliance owning the largest AI data center or AI application company.

Deepak Garg 52:48

I would just say go fundamental and invest a lot of energy, create surplus. Fundamental energy is the currency of AI. If you have energy, then I think a lot of other things may still be solved later.

Siddhartha Ahluwalia 53:03

Thank you so much, Deepak. It’s been a pleasure. I learned a lot and had a lot of fun.

Deepak Garg 53:09

Thank you so much for having me here. I also enjoyed this chat. Thank you so much.

This is the first chat I’ve had on so many diverse topics.

Siddhartha Ahluwalia 53:17

Looking forward for more conversations.

Deepak Garg 53:18

Thank you, Siddhartha.