Media Day: VCs and Founders in AI Presented by theCUBE + NYSE Wired | Winston Ma, New York University School of Law

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More from Media Day: VCs and Founders in AI Presented by theCUBE + NYSE Wired

Winston Ma

Investment Partner & Co-Founder of Dragon AI, Single Family Office

Dragon Global

play_circle_outline Winston's background in law, finance, and tech, managing family office money, and teaching at NYU

play_circle_outline Exploring Investment Opportunities in Digital Infrastructure Market: Physical Layer, Cloud Computing, and Data Prep

play_circle_outline Discovering Lucrative Opportunities: Investing in Armada's Edge Computing AI for Digital Infrastructure Market Growth

play_circle_outline Public-private partnerships at all-time high

play_circle_outline Mobilization for chip industry can be similar to setting up a fund for digital/cryptocurrency infrastructure

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Winston Ma, New York University School of Law

Winston Ma

Investment Partner & Co-Founder of Dragon AI, Single Family Office Dragon Global

John Furrier, host of theCube, interviewed Winston, an accomplished investor, author, and adjunct professor at NYU, about his experience in managing a family office, making investment bets, and the current digital infrastructure trends. Winston discussed the multi-trillion dollar investment opportunities in digital infrastructure, including physical layers like NVIDIA and cloud computing, as well as data management infrastructure. He also talked about his role in making investments for the family office, focusing on early-stage startups with a smaller risk pr... Read more

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What is your professional background and experience in law, finance, and tech industries? add

What are the different layers of digital infrastructure and how are they evolving? add

What are some recent developments in the digital infrastructure sector, such as investments in data centers and edge computing companies? add

What potential sources of funding could be used to support initiatives like space force, a crypto fund, and blockchain technology, in order for the U.S. to maintain a position of strength in the global economy? add

What is the suggested approach for setting up digital and crypto infrastructure for wealth development, involving generative AI and potentially going public on domains? add

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Winston Ma, New York University School of Law

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>> Hello and welcome to theCube back here to NYSE. For our media days, we wind down, the bell is closed, people are pouring out, they're putting mad monies up and running. That sets up and running. Kramer's doing his show, and they've got a party setting up here for all the activities. I'm John Furrier, host of theCube. We've got Winston here, who's an accomplished investor, author, adjunct professor at NYU Winston, great to see you. Thanks for coming on, theCube. Thanks for spending the time.

>> Thank you, John.

>> So first of all, you got a book here, so show the book, hold it up to the camera.

>> Of course.

>> Hunt for the unicorns. Put that camera right there, hunt for the unicorns. You got a great background. I want to set the table.

>> Yes.

>> You were managing a sovereign fund?

>> Yes.

>> Okay. You're now managing a family office money for private investments.

>> Yes.

>> You're an adjunct professor at NYU. You run the department for public investing.

>> Yes.

>> You're an author. You got a good aperture of experience and looking at what high growth looks like, and then what bets to make. So you've made many bets. First of all, take us through what is it like one doing it, and then how are you making the bets today and what's going on with the bets in the market today? Start with what you do first.

>> Really kind of treating that question. So first of all, I think my background is very much like editing in the intersection of the three pillars, law, finance, and tech. And it just happened that I started as a material science major. Also did a software programming, which gave me the foundation for my today's focus in the digital economy. And from there I become just like you, I went to the Wall Street, become a happy lawyer, banker, JP Morgan, and then institutional investor, a sovereign fund for global investing. And now I'm based in New York, a part of a single family office. I'm tech investing and also an NYU professor and the program director on the community of the public investment funds, which are the largest long-term capital investors in the world, like the sovereign fund and the pension fund.

>> What's more fun being the professor or to pick one, what's more fun?

>> Obviously the good thing is to do both. As an adjunct professor, you can be teaching and also work with these big investors and professors.

>> Adjunct means you come in, it's like you're freelancing, but you get the benefits of a professor, but you don't have to go down the track like the tenured professors if I understand correctly.

>> Correct.

>> You get to have fun.

>> Yes, yes. Because I can engage guest speakers, the executives of the sovereign fund pension funds because they enjoy talking to the students as well. And also, NYU provides an academic platform to engage these guys to compare thoughts about their latest investing, for example, digital infrastructure is a big topic these days.

>> I love the focus and love that you got all your hands and a lot of good action. Let's talk about digital investment infrastructure. We're seeing this become the big focus. Certainly, obviously everyone talks about the big clouds, the CapEx, there's clearly the GenAI wave is here. There's a bit of a hype cycle. Some say the air's coming out of the balloon a little bit, but this clear productivity gains where you're seeing a bubble won't pop, at least that's my opinion. I think that's pretty much well agreed on.

>> I think you're right.

>> So there's low-hanging use cases, but there's still a lot of thorny issues coming, but it's a reset retrofit. What's your view of the current digital infrastructure thesis of the market? Are people paddling as fast as they can? Trying to go as fast as they can? Is scope where we are and the progress in your mind?

>> Terrific. I think this is such a big story. So it will lead it to multi-trilling investment opportunities going forward in terms of digital infrastructure. So the first is quite obvious, is the physical layer of digital infrastructure as we have seen the runaway stock price of NVIDIA, the physical layer, and also the GPU as a service type of thing. And then the second we are seeing the development of cloud computing, which you are a big expert on that one. The evolution of data lakes, the evolution of a hybrid cloud. So we have tremendous investment into that area. And then the third layer is just the initial data preparation infrastructure. How do individuals, users, as well as the enterprises, collect, manage store data going forward. We need a lot of these kind of basic infrastructure as well. So all these will lead to multi-trilling dollar investment opportunities. But the biggest one, which mostly relevant to these biggest long-term capital investors would be the physical ones going forward. Because in the past there are big investors in the real estate or traditional infrastructure like transportation, like the utilities. But now they see digital infrastructure as a new infrastructure as a class for them.

>> We just did a big thing on economists, our CUBE research team just published last month in the print edition, digital twins, not from a manufacturing standpoint, but from the fact that you can use digital to simulate and make efficient physical things. And they're both first party citizens with each other, not one's second party subordinate. It's all equal because if done properly, the gains from either no defects and manufacturing translates to better sales event and sales and marketing or better process, whatever the process is, you can do some things with digital. This is the first time I've seen that happen where it's actually into the process, not just a bolt-on after the fact. This is a big change and should change the-

>> It's epic before then after.

>> Yeah. So the economics will change because you're going to be more productive.

>> Yes.

>> What's your view on that? Do you agree obviously, or no, or what's your reaction?

>> It is quite interesting because Metaverse concept came up from Facebook, and it didn't do very well for Facebook during 2022 and 2023, but now it well could be Facebook that will add into the AI concept and make the Metaverse concept relevant again. And this is the digital trend concept you mentioned, but now it's slightly different and more intelligent because now you have the AI component added to it.

>> What kind of investments are you making right now? So talk about your current role as you've got family office, which means someone who has a lot of capital. It's not kind of like a hedge fund or VC. They're deploying, they're making investments bets. What's your thesis right now on the bets you're making? How big of the checks do you write? Can you share that information? Is it proprietary or what's the-

>> Sure. I think the good thing about working to a family office is that it's very nimble. So they can get into a new trend like AI very quickly. And for the sovereign fund type of circle, they want to write a big check and they want typically get into a startup once it is more de-risked. So being a partner of a single family office give me the opportunity to get to see companies in their early stage.

>> So risk profile's different.

>> Totally, yeah. And as a check, obviously there's smaller, let's say typically five to 10 million for the seed round or A round. And then we try to be active with the company after the investment so we can help them to grow with the institutional connection. So it's like nimble investor, but with the institutional connection.

>> You're partnering with the entrepreneur and the founding entrepreneurial team to grow whatever that line of sight, objective, product, market fit, scale, go to market. These are the normal things you start to see trajectory.

>> That's right. That's right. And the connection with the institutional investors is super helpful for their later runs. But at the very beginning, the family office can be this quick investor during their early stage when they're still early in their revenue path, or they are at the early stage of signing up their first five enterprise customers.

>> So you can make decisions quick. You can have a risk profile that's more private in the early stage, private or growing early stage.

>> And maybe a little risk taking.

>> Yeah, of course. That's the fun part. I mean, there's no reward without risk. There's a cap on that. It's symmetrical, less risk, less upside. I mean, this is how it works.

>> Exactly.

>> Have you seen anything change on the landscape around entrepreneurs? You're seeing a lot more, and we're seeing this with the NYSE Wired community, a lot more accelerated time to value, meaning whatever that value point is, it could be traction, it could be a funding round. You're seeing a lot more operating leverage from digital. What's your perspective on this? Because you're seeing new formation patterns around how teams are formed. We heard about the TenX engineer in the cloud. Remember that that was a function of better labor access in the cloud. Now you've got business productivity with AI. So you have a TenX potential force multiplier on productivity. Yes. So okay, I don't need a third, I don't need maybe no one or solo entrepreneur, solo general partner in the VC world. So the labor market's changed and any thoughts on that?

>> Yes. So I think you're absolutely right that it's much easier for a founder to start a startup because they get a lot of, let's say, shared digital infrastructure resources like a cloud. So they do not have to build up IT system, they can start with the cloud or because of the AI, they get the help from AI system. So the startup process becomes much easier. But at the same time, I think you are also right. I think your concept of faster passive success is very obvious today because the global market, capital market is pretty tight. You see guys like OpenAI can get to 6.7 billion round done within a few months, but for some startups, maybe they're going to take them quite a few months or even a year to get a round done in this market. So they have to show passive success much more quicker, either by signing up a few clients or by signing up a partnership with a big name. Either way, they have to show their past to be institutionalized more quickly than before.

>> So you've got the book Hunt for Unicorns.

>> Yes.

>> Okay. You're seeing now a new batch of unicorns coming on. How do you identify the unicorns? What's their formula for success? Most artists don't want to share their formula for success, but if you could give it a little teaser around, okay, what do you look for when you look for those unicorns? Because the best investors that I've met on private is they buck the trend. They see something before someone else. It's not a herd mentality. They'll see waves. But you have to understand, you can't be too out front or your driftwood or that wave, or if you miss it, you're on the other side. So it's a lot like surfing, I guess. But what do you look for from a pattern, seeing things early going that's going to connect that dot? What's your formula?

>> Now this question is very relevant to the space of the public investment funds. In the past, these sovereign funds or pension funds, they become the new VC and they tend to be the liquidity provider. They come in like a pre-IPO round, putting large check into it. In some way, they're more unicorn makers than unicorn hunters because when they write a check, actually by definition after a your 100 minute-

>> And the VC's lock in their IRR, house money going forward. Changing the dynamics.

>> So that was the happy hours of old days. At the time, the keywords are mobile payment, mobile applications, and a mobile user traffic. So if you have a mobile application powered by mobile payment, you can accumulate mobile user traffic a lot. So you can show a nice chart of user growth and maybe revenue growth. And then you say, "This is great, we can go IPO." But that story is no longer in this market. So in this market, people want to see real technology and real application that can lead to real productivity gains. So even the large summer fund pension funds, they become early stage investors because they want to go into real tech and they try to capture the early value. So in this context, a real successful startup has to have a niche advantage.

>> So be a unicorn hunter, not a unicorn maker.

>> Exactly.

>> Because there's always a cap on that because the risk profile is limited, constrained by that risk profile, there's some liquidity, some incentive to kind of get you in, but you're not really making that unicorn happen.

>> That's right. Yeah. Because the earlier model, the big investors in some way, just lazy. They would say, if it become a pre-IPO, that means it's de risked. So I'm ready to write that 100 million check. That was too easy. And now for various reasons, companies stay private for much longer. So even the long-term investors, they want to get into the company earlier because that plays into their stress.

>> So you got a fun job. What are you most excited about, and how many checks do you write? Because I'm imagining you're probably not writing a lot of checks, or are you? Or what's the frequency, is it a feel? What's the due diligence? Take us through some of the process. What are you excited about and process and just metrics of how you invest, check size, number of deals, et cetera.

>> So definitely the check frequency is much slower now than before, and for good reasons. For good reasons. Because as we discussed, right in the mobile internet era, everything is very standardized. Mobile application, mobile payment, mobile user traffic. And now it's about a real technology or heart attack, a new innovation from the digital ecosystem. So AI seems to lead to a interesting vertical, but the application is still yet to be proven. So we try to be in that space, but at the same time, we tend to be very selective.

>> The traction matters.

>> Oh, totally.

>> You got to see the traction.

>> Yeah. And you want to see the path to success.

>> Yeah, exactly. All right, and so what are you most excited about right now? As this is starting to come back, we're seeing post-election, a lot of market activity. Obviously it's a relief rally, but also some people see, at least we know what's happening and there's no anxiety, at least from an uncertainty standpoint, known and unknown. And you're investing in some great area, so congratulations on that. Fun. What are you excited about?

>> Digital infrastructure. Right now, the digital infrastructure story is just so huge. The numbers are coming in are just mind boggling. So for example, recently Equinox announced a 15 billion partnership with two big public investment funds, the Singapore GIC and the Canadian Pension CPPIB. So they tried to build 15 billion new data centers, like triple their existing hyperscale, cloud computing.

>> And CapEx is off the charts with the cloud guys. And you mentioned edge, you had an edge investment. Talk about that one.

>> Yes. So the family office I'm involved with recently made an investment into edge computing AI company called Armada. It's a US-based tech company that uses modular data center to handle data in remote places like oil fields, like mining factories. In these remote places, they have some existing data system, for example, industry camera or the supply chain over there. But they have never done much with that data.

>> That edge, in military, they call it the tactical edge. You need to have operational agility, but also performance. And that's why these kind of footprint, modular footprints are in demand because there's need there. Power is needed. Some solar is probably involved.

>> Totally.

>> So cooling that's built into the modular. So it's prefabbed drop in a data center, pop up data center.

>> So it's almost like a new market, right? Edge computing, but it will be a very big market. You know what? Because today we have more connected things than connected people, and it probably were more so in the coming years.

>> I love infrastructure. People know that I love infrastructure, so I'm kind of biased. But you're seeing the evolution. Back in the old days you had telephone closets where where the wires were, and then you had, everyone knows in the street those things where the cable guy has to install stuff for the phone company back in the day. Those are small cabinets by our standards. You could almost envision these kind of cabinets near light poles or bigger cabinets near where there's critical need or critical infrastructure being standard. And then obviously with wireless 5G-

>> 5G, yes....

>> is beautiful, right?

>> Yes.

>> And you got Wi-Fi. I mean Broadcom's got five Wi-Fi going gigabit, 10 Gig.

>> Yes. That's why the cloud of computing going to be a lot more diversified going forward. It is kind of back and forth. In the past, people afraid of a hyperscale and then they say, oh, we're going to go into hyperscale. But now they say, actually maybe there are a variety of cloud services we can think of like a combination of hyperscale and these nimble data centers you described.

>> It's distributed computing. I'm sold. We're both talking to ourselves with how convincing ourselves, because we're both in agreement. Distributed computing paradigm has been around for a while, but it's becoming modernized. And the capabilities are multi-fold benefit than old days. So I think through the computing, and now with cloud and cloud operations, you have an operating model and operating systems, you're going to start to see data do different things. You're going to see different patterns. It used to be north, south, east, west traffic. Well, no, no. Now you're going to see co-located data, harmonization layer. Really exciting computer science technology.

>> Very much so. I share that excitement maybe from this period of data science development, there will be another noble price for physics.

>> Whoever can change the laws of physics will win everything. That's what we want, we can't move it. But Winston great to have you on. For the folks watching Winston was also a captain at the NYSC reception we had during media week, we both had the AI summit captains had some. Although I got mine from Kevin after he was up on the big announcement. I was running the table. But it was a really fun community. You're valued member of the NYC wired community.

>> Thank you.

>> And now the Cube plus NYC.

>> Yeah. Before we leave, I definitely need to mention about the election and the Trump and the sovereign west fund.

>> Oh, please. Absolutely. Go ahead.

>> Because just last month, just before the election day, Trump suggested the idea that US should created a sovereign west fund itself after taking so many investments from foreign southern funds, pension funds. I think it's-

>> What's thoughts on that? Possible, doable? Do you think that's going to happen?

>> Yeah, it's quite possible because Canada and other western countries like Island, they all have sovereign funds and they set up as a government fund to promote innovation and infrastructure. Just like the U.S., They're not the surplus countries like the Middle East oil company countries, but they can find a way to finance this sovereign fund to promote industry policy, infrastructure, investing and innovation.

>> By the way, I think first of all, my opinion on that is public-private partnerships right now are at an all-time high, number one. Number two, he already sees the value in say, space force. He sees the value in a crypto fund because crypto is a limited resource too, technically.

>> Yeah. It's also data management, right? Blockchain technology, data management.

>> And also he wants the U.S to lead. And so that also aligns there. But now we're in a global economy, so it's leading from a position of strength. So sovereign funds supports that. So then the next question is, where does the money come from? Does it come from the U.S? Does it come from a fund of funds? I mean, that's your world, that's not my world, but I'm just putting it out there. How would you structure that?

>> Could it be several sources of funding, and it could be a combination or three. Why is the government budget and money. Because the government can't always use a pocket to finance a new fund, but that requires the legislative support. And then the second one is through public-private partnership you mentioned. And this thing actually was tested a little bit because during Trump's last term, Treasury Secretary Mnuchin socialized the idea of a U.S treasury department work with foreign sovereign funds to set up a infrastructure funding.

>> So this groundswell for this, there's a groundswell for this.

>> Exactly, exactly. And then the third one is really through a new legislation, just like a Chips Act.

>> Chip Act.

>> Which will mobilize the U.S for the chip industry. You can imagine the similar mobilization setting up a vehicle for digital infrastructure or even for the crypto infrastructure.

>> Well, digital infrastructure, crypto, smart contracts as wealth developers, you got generative AI, which might look like a small, medium-sized business, but you can have a nice growing business, maybe even going public on domains. So I mean, yeah, Winston, I love it. I'm in. I think the government should do another question is who's over sighting? Get the government out of the way, put the money up, and then get out of the way. I'd be buying my vote.

>> That'd be the question to President Trump when he enters into the office.

>> Course he'll take credit of that. It should be the biggest ever. Has to be the biggest ever. Winston, thanks to having you on theCUBE.

>> Thank you, John.

>> Okay. Want to say thanks to the team here at the NYSE for going a little bit late. We went over, appreciate all the support. And again, it's theCUBE's East Coast Studio here at the NYSE. I'm John Furrier, your host of theCUBE. Thanks for watching.