Scale of the AI Financial Bubble

David explains why current AI market inflation dwarfs dot-com, driven by big companies' stock moves and capex.

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Episode notes

On this episode of Invested, Michael sits down with David Magerman, a co-founder and Managing Partner at Differential Ventures, a New York-based venture capital fund investing in deep technology companies that help power the data-driven economy. Previously, he spent the entirety of his career at Renaissance Technologies, widely recognized as the world’s most successful quantitative hedge fund management company. He helped found the equities trading group at Renaissance, joining the group in its earliest days, playing a lead role in designing and building the trading, simulation, and estimation software. David holds a PhD in Computer Science from Stanford University where his thesis on Natural Language Parsing as Statistical Pattern Recognition was an early and successful attempt to use large-scale data to produce fully-automated syntactic analysis of text.

David is also the founder and president of Tzemach David, an education-focused foundation working to make education in Israel more accessible to English-speaking immigrants. Outside of his foundation's work, he is a significant contributor to the OU-JLIC in Israel, Koren Publications, Lori Palatnik's Momentum Unlimited, The City of David, and Rabbi Shlomo Katz's Shirat David, as well as some other more under-the-radar projects supporting the development and strength of the Land of Israel.

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KEY TOPICS

00:00 - Intro

02:55 - Why Wall Street’s Smartest Fund Rejected Finance People

06:04 - If You Can’t Close, You’re Useless

08:42 - The Hedge Fund That Invented Google Culture

12:58 - We Got Rich Solving Problems That Didn’t Matter

15:55 - How Jim Simons Proved Economists Were Wrong

17:23 - Success Was the Only Thing That Made Me Happy

18:28 - Why My Team Was Afraid of Me

21:56 - The Day I Realized No One Actually Cared

25:42 - Why Renaissance Was a Moral Failure