Jim Chanos & Val Zlatev: Long and Short Alpha in AI, Semiconductors, Data Centers, Neoclouds, and Data Centers | MacroMinds Symposium 2026
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Where to find value in the AI boom on the long side and the short side? This is the question that I asked two great investors earlier this month when I had the privilege of hosting Jim Chanos and Val Zlotov. Jim is a legendary short seller renowned for his short positions in Chinese real estate stocks, Wirecard, and, of course, Enron. Val manages a multibillion dollar hedge fund with a sterling track record for alpha generation in long short investing in semiconductors and tech hardware specifically. This was at a panel I hosted for MacroMinds Symposium, a mission driven conference for institu
Well, as Rick Reeder said in the previous panel, I mean, it is dominating everything in the financial markets right now. It's really a unique concept when it comes to, particularly the equity markets, but increasingly the credit markets as well. And so the really interesting thing is, as you talk to people who are far more knowledgeable about it than I am, And you get many different opinions on where it's going, what's going to happen, and whether there's an ROI at the end of the rainbow. And the answer is nobody knows for sure yet. We're that early on. The one macro comment I'll make since we
Al? So I'm not a macro investor, and I'm not going to argue about the overall effect on the economy. But from a micro perspective, when we listen to the companies or we talk to the companies that we invest in, both on the long side and the short side, what we've seen is that the effects of AI on the actual individual businesses are pretty well seen. And many of the CEOs of the companies that we cover are quite excited about the impact so far. And it's very simple to actually just look at headcounts over the last three or four years compared to the operating profits of these companies, and you
But if you really want to be scared, I'll tell you that I'm net long AI versus my short. That would terrify you all.
True, So Joe, you're net long via the index, so what are you short? So you're not short the semis, or at least in size relative to the S and What
are you short? So, we're, I mean, we, I'm going make one preface comment before I go into that. One of the other things you have to also keep in mind, and we did see this parallel in the late 90s, is when you get these type of capex, technology capex booms, and there's no doubt in anyone's mind, bulls and bears agreed we're in a capex boom in high-tech, there is a disconnect in the profitability accounting between the companies that are selling the picks and shovels, in this case the chips and data center equipment and construction companies, what have you, and the companies that are spending
It dropped
40%. Yeah. When order books dropped and costs continued, particularly depreciation, but order books collapsed and profitability of the S and P 500 dropped as much in that year, which was a mild recession, as it did during the global financial crisis. S and P earnings were down about 40% both periods. So we really have to kind of watch that. But what we're focused on, Jack, is what we think are inherently unprofitable business models that are attached to this AI ecosystem, where any way you kind of look at it on a best case basis, the returns on capital are going to be de minimis. So we would l
So I want to talk about the neoclass in a moment, but first let's talk about this depreciation question. We're in a CapEx boom. Most of the chips that are being bought are being capitalized so they don't, you know, they don't go out of operating expenses. They go out of they're capitalized and then they are depreciated away ove
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