Podcast Notes | Bill Ackman's Latest U.S. Stock Moves: Unwinding Google and Buying Back Netflix, Why You Don't Need to Worry About an AI Compute Bubble?
Compiled: TechFlow
TechFlow Overview: Wall Street’s legendary hedge fund manager, founder and CEO of Pershing Square, Bill Ackman, recently granted an in-depth interview to the well-known financial podcast Equity Mates. Beginning with a small two-person investment club, he now helms a Wall Street investment giant managing over $33 billion in assets. In this exclusive discussion, Bill Ackman reveals for the first time the underlying investment philosophy that has guided him through multiple economic cycles, along with the core rationale behind his recent major portfolio shifts that have sent ripples through the global financial community.
During this 70-minute, highly dense conversation, Bill Ackman firmly refuted widespread market concerns regarding a “computing power and AI bubble,” pointing out that humanity is rapidly approaching superintelligence, while society’s genuine demand for foundational computing power asymptotically approaches infinity. He also extensively reviewed the decision-making process behind liquidating his Alphabet stake and aggressively increasing his position in Netflix, thoroughly broke down the underlying mechanics of Warren Buffett’s compounding engine driven by insurance float and zero new share issuance, and unveiled his ambitious strategic blueprint to transform the real estate and urban development titan Howard Hughes into a “modern-day Berkshire.”
Guest: Bill Ackman (Founder & CEO of Pershing Square, Wall Street billionaire hedge fund principal)
Hosts: Bryce Leske, Alec Renehan (Co-founders of the Equity Mates podcast)
Podcast Source: Equity Mates (https://www.youtube.com/watch?v=IN8ugYE4UmE)
Original Title: Why Bill Ackman Bought Back Netflix, Sold Google & Is Building the Next Berkshire
Air Date: October 28, 2026
Key Takeaways
Computing power demand is far from a bubble; the true bottlenecks lie in energy and excessive leverage: Demand at the computing layer is absolutely not a bubble. Humanity is rapidly approaching superintelligence, and the aggregate demand for it approaches infinity. Therefore, staying long on computing power remains a highly certain, high-quality trade. The actual risks do not reside on the demand side, but rather stem from the excessive financial leverage within emerging cloud service providers (Neoclouds) and the severe strain that data centers place on the electrical grid and primary energy supplies.
Liquidating Alphabet was driven by a shifted risk-reward ratio: Alphabet remains one of the world’s greatest commercial franchises, with its search interface effectively evolving into the public’s natural gateway to affordable AI compute. However, following the stock’s substantial rally, its forward-looking expected return fell below Pershing Square’s long-term target threshold, prompting a decision to take profits.
A disciplined recalibration on Netflix: In 2022, just three weeks after management unequivocally declared they would never pursue advertising, the company reported alarming earnings results, reversed its stance, and caused a precipitous drop in business predictability. Acting on strict risk control protocols, we cut our losses decisively. Today, Netflix has successfully monetized its advertising tier, cemented its untouchable status as the global streaming leader, and generates formidable cash flow. When short-term attention metrics triggered panic selling that drove the stock price down nearly 50%, we bought back in forcefully.
Berkshire’s core mechanic is not stock picking, but insurance float: The public often fixates on Warren Buffett’s remarkable stock selection, overlooking Berkshire Hathaway’s truly irreplaceable moat: securing permanent, unleveraged investment capital via insurance float at near-zero or even negative cost. Over past decades, virtually freezing new share issuance has ensured that 100% of asset appreciation compounded directly into intrinsic value per share.
Forging Howard Hughes into the next modern Berkshire: Pershing Square is accelerating the transformation of urban development giant Howard Hughes (in which it holds a 47% controlling interest) into a holding conglomerate. By integrating the wholly-owned insurance platform Vantage to absorb massive, continuous premium float, allocating 60% of assets to zero-risk short-term Treasuries to back liabilities, and deploying the remaining 40% into high-compounding long-term equities and core physical assets, it aims to replicate a diversified compounding machine.
Mentor Warren Buffett’s quirks and foundational principles: Bill Ackman once hosted Warren Buffett for dinner at his residence. When asked whether he preferred still or sparkling water, Buffett bluntly stated he hasn’t consumed a single glass of plain water in forty-eight years, relying instead on seven cans of Cherry Coke daily to maintain peak cognitive function. In investment decision-making, adhering to a lifelong mentor-first principle of “What would Warren Buffett do?” is the core differentiator between mediocrity and excellence.
II. Key Highlights
On computing power and superintelligence: “I do not believe there is any bubble in computing power demand. We are infinitely approaching superintelligence, and humanity’s total demand for it is infinite. Consequently, across the entire technology diffusion chain, maintaining a long position on computing power is an exceptionally sound macro trade.”
On the biological limits of AI: “Large models currently deployed in data centers are highly energy inefficient. You feed a prompt to a large model, and thousands of billions of parameters activate simultaneously across the cluster; yet the human brain accomplishes complex decisions by firing only a minuscule fraction of synapses. Future algorithmic models will inevitably evolve toward neural biomimicry and recursive self-improvement.”
On the psychological journey of selling and rebuying Netflix: “In 2022, during our face-to-face meetings with management, they staunchly vowed they would never run ads. Three weeks later, during the earnings call, they completely pivoted. When certainty evaporates and outcome dispersion spikes, you must cut losses immediately. They have since proven the advertising model works, solidified their throne as the undisputed global #1, and possess extraordinary cash flow generation. Buying a exceptional company at a 50% discount is basic investment common sense.”
On Berkshire’s core competitive moat: “Many only study which stocks Warren Buffett bought, failing to comprehend Berkshire’s balance sheet. The insurance franchise gave him access to massive pools of capital at zero or negative cost for decades, and he has avoided shareholder dilution via new equity issuance for sixty years. That is an unreplicable compounding engine.”
On Howard Hughes’s strategic mission: “Pure insurers struggle to scale back during industry downturns, while standalone real estate developers are perpetually undervalued in public markets. Our thesis for converting Howard Hughes into a diversified holding company is to create a chemical reaction between insurance float and high-certainty physical assets, constructing a multi-decade compounding snowball.”
On the mystery of Warren Buffett’s longevity: “When he dined at my home, he told me he hasn’t had water in forty-eight years. Seven cans of Cherry Coke daily, coupled with an investment mind that remains razor-sharp at eighty or ninety. It proves one thing: sustaining intense passion and a highly active, rotating cognition may be the most potent weapon against aging.”
III. Full Discussion
1. Macro Debate on Computing Power and the AI Bubble: Compute Demand Approaches Superintelligence; Energy and Leverage Pose the Real Risks
Bryce & Ren: The hottest debate on Wall Street and in the global tech sector revolves around whether AI is ultimately a massive bubble. Companies like Nvidia, Microsoft, and Meta are making hundreds of billions in capital expenditures, while power shortages across data centers and the electrical grid are triggering alarms everywhere. As the helm of a concentrated, high-stakes hedge fund, how do you view this macro landscape? Are we actually inside a bubble?
Bill Ackman: If you are referring to the fundamental, underlying demand for computing power, I do not see any bubble here.
You have to approach this from first principles: human society is currently approaching so-called superintelligence at a staggering pace. If you consider what superintelligence actually entails, the collective demand from all of humanity for it is genuinely infinite. To reach that shore, the only hard physical currency available is computing power. Therefore, from a macro investment standpoint, steadfastly going long on computing power is a highly certain long-term trade.
Bryce & Ren: Then where does the risk actually lie? Why does volatility in tech stocks remain so violent?
Bill Ackman: The real risk is not in the demand itself, but in the capital structures underpinning infrastructure buildouts.
We are observing many so-called Neocloud entities applying excessive financial leverage to construct compute leasing networks and data centers. Microsoft itself possesses an investment-grade balance sheet and massive cash reserves; tech giants use credit intelligently. But when mid-tier players overly reliant on debt leverage encounter cash flow mismatches, localized failures occur.
Furthermore, this AI arms race drives massively scaled physical investment: chips, servers, data centers, and most critically, energy and electrical infrastructure. This objectively keeps energy prices elevated and feeds back into broader macroeconomic inflation stickiness.
Bryce & Ren: Many in the tech space worry about ultimate AI失控 scenarios, such as frontier models gaining autonomous consciousness or creating catastrophic safety risks. Are you pessimistic or optimistic about this? Should regulation hit the brakes?
Bill Ackman: I believe these risks are absolutely real and must never be understated.
First, biologically speaking, the neural networks running in massive data centers operate with profound inefficiency. When you feed a prompt to a large model, hundreds of billions or even trillions of parameters must fire entirely to generate a response; yet the human brain commands an arm movement or solves a problem using minuscule electrical signals and local synaptic activation. Large models will inevitably evolve toward biomimetic architectures and recursive learning frameworks.
More unnerving is that even leading scientists at firms like Anthropic admit they do not fully understand how deep representations within large models self-emerge and learn. These models have exhibited behaviors that break safety guardrails or prioritize objective fulfillment over rule adherence.
Yet this does not justify throttling compliant U.S. tech companies through draconian administrative regulations. If you force the brakes while overseas competitors, entirely unconstrained by ethical frameworks, sprint full speed, the resulting civilizational asymmetry risk becomes unbearable.
2. Portfolio Rebalancing Review: Why Sell Alphabet and Buy Back Netflix?
Bryce & Ren: Let’s discuss your two recently scrutinized tech equity moves. You exited Netflix entirely in 2022, only to aggressively repurchase it this year. You held Alphabet for an extended period before recently liquidating the position. Can you walk us through the genuine reasoning behind these calls?
Bill Ackman: Both operations cleanly illustrate Pershing Square’s ironclad investment rules: we are long-term investors prioritizing extreme certainty and high predictability.
Take the painful 2022 sale of Netflix. Our initial purchase was predicated on conviction that it would emerge as the singular endgame winner in the global streaming wars, operating an exceptional business model. Following the buy, I brought the team to meet management face-to-face. We ran a detailed presentation and proposed a strategic pivot: given slowing user growth, why not introduce a lower-priced ad-supported subscription tier to broaden the acquisition funnel?
Management responded unequivocally: We will absolutely never pursue an advertising model.
Bryce & Ren: What happened three weeks later on the earnings call?
Bill Ackman: Precisely three weeks later, Netflix reported disastrous earnings, showing rare subscriber net losses. Management appeared flustered and entirely unprepared on the call. Shockingly, they immediately reversed course, stating they were seriously considering launching an ad-supported tier.
That moment triggered total vigilance. A premier commercial franchise flipping its core tenets in merely three weeks, coupled with management’s apparent loss of control over the business trajectory, shattered my confidence in the company’s predictable outcomes. Outcome variance expanded exponentially: if their pivot failed, the stock could collapse.
While we believed their elite team would likely survive, with certainty broken, we enforced strict investment discipline: decisive stop-loss execution, exiting the entire position near $275, absorbing the unrealized loss.
Bryce & Ren: So what prompted the repurchase this year?
Bill Ackman: Because reality proved them correct, and the market presented an outstanding odds setup.
Over recent years, Netflix demonstrated astonishing execution. They matured their ad-member ecosystem flawlessly. Post-Hollywood strikes, rivals like Disney and Paramount plunged into losses and retrenched, allowing Netflix to permanently seize uncontested leadership as the global streaming powerhouse, evolving into a massive free cash flow printing press.
Recently, panic selling erupted over mild fluctuations in North American daily engagement minutes, cratering the stock nearly 50% from its peaks. A foundational monopoly with stronger moats, richer cash flow, and higher predictability trading at half price was too compelling. We didn’t hesitate to redeploy heavy capital.
Bryce & Ren: What about Alphabet? Given your bullish stance on AI compute and digital ecosystems, why sell Google while maintaining heavy positions in Meta, Microsoft, and Amazon?
Bill Ackman: The core driver is pricing relative to risk-adjusted returns.
After exiting Netflix, we rapidly rotated into Alphabet in early 2023. At the time, the market was terrified by ChatGPT, awash in headlines declaring “Google Search is dead" and “dominance crumbling.” This depressed valuations drastically, offering a highly attractive margin of safety.
Today, however, Alphabet has rallied to levels fully reflecting its intrinsic worth. Over a five-to-ten-year forward horizon, its annualized return profile falls short of Pershing Square’s rigorous compounding thresholds. Conversely, our Meta entries, acquired post-metaverse crash, sit at ultra-low cost bases with more robust commercial monetization and entrenched moats. Alphabet remains a magnificent enterprise, and its search box serves as a natural conduit for mass-market affordable AI compute, but within capital allocation mathematics, it must yield priority to higher-probability, higher-return opportunities.
3. Decoding Berkshire’s Fundamental Engine: Low-Cost Insurance Float and the Compound Miracle of Zero Stock Dilution
Bryce & Ren: You’ve frequently emphasized Warren Buffett’s indelible impact on your investing career. From your first meeting at twenty to lining up at Berkshire’s shareholder meetings four times to ask questions. Many emulate Buffett, yet you argue most fundamentally misunderstand how the Berkshire machine operates?
Bill Ackman: Most observers remain superficial, mistakenly viewing Berkshire Hathaway as merely a god-tier hedge fund skilled at selecting Coca-Cola, See’s Candies, or Apple. That认知 is vastly reductive.
If you genuinely dive like a financial geek into reading the “Financial History of Berkshire Hathaway,” meticulously tracing every annual report and asset restructuring move across Warren Buffett’s six decades, you reach one stark, electrifying conclusion: Berkshire’s true propulsion comes from the float generated by its insurance franchise.
Bryce & Ren: Can you detail the internal gears of this engine? How should everyday investors grasp the concept of float?
Bill Ackman: Insurance is a remarkably clever commercial structure. Clients pay premiums upfront today to secure future contingency coverage. Provided your actuarial underwriting executes flawlessly, collected premiums structurally exceed eventual claims payouts and operational overhead. What accumulates in your account functions essentially as perpetual borrowing at zero cost, or even negative cost.
Conventional hedge funds or investment firms borrow and leverage constantly facing margin calls and forced liquidation bankruptcy threats. Yet Warren Buffett, backed by National Indemnity and later GEICO, continuously sits on hundreds of billions in permanent float that doesn’t retire, demands no crushing interest repayments, and carries no liquidation pressure.
He deploys these exceptionally cheap capital pools partly into ultra-safe Treasury bills to guarantee liquidity against runs, and largely purchases equities and physical enterprises wielding strong pricing power and durable cash flows.
Bryce & Ren: And he almost never issues new shares recklessly.
Bill Ackman: Exactly. That’s the second core cipher.
In the 1960s, Berkshire Hathaway’s outstanding shares totaled roughly one million. Only after acquiring General Re over thirty years later did the total expand marginally to around 1.5 million. For decades thereafter, not only did he halt share issuance, but he aggressively retired shares during valuation dips.
This means decades of imperial asset appreciation compounded without any Wall Street-style new share dilution bleeding away value, sinking entirely and precisely into the intrinsic value per share. Ultra-cheap or negative-cost perpetual float, married to ruthless discipline against equity dilution, constitutes the foundational arithmetic of Warren Buffett’s supremacy.
4. Constructing a Modern Berkshire: The Trillion-Dollar Ambition Behind Howard Hughes’s Holding Company Pivot
Bryce & Ren: This logically segues into your expansive restructuring plan for Howard Hughes. With Pershing Square controlling 47% of the voting equity, you are converting a traditional real estate and master-planned community developer into a modern Berkshire Hathaway analogue. Why deploy it to carry this ambition?
Bill Ackman: This represents a strategic layout spanning over a decade.
Few recognize Howard Hughes’s origins. During the subprime crisis, premier U.S. mall giant General Growth Properties filed for Chapter 11 due to unhedgeable leverage. We purchased a 25% stake at the trough, joined the board, ultimately preserved shareholder equity entirely, and engineered one of Pershing Square’s highest-yield investments.
To insulate the restructured commercial assets, we stripped and spun off non-core, mall-irrelevant miscellany into a separate public entity, forming today’s Howard Hughes.
Bryce & Ren: What exactly comprises its core assets now? Why does it trade persistently at a discount in the U.S. public markets?
Bill Ackman: Because it is fundamentally not a conventional real estate firm. It effectively operates multiple independent miniature cities.
We own Summerlin in Las Vegas, a premier master-planned city spanning tens of thousands of acres. In Houston, we anchor The Woodlands and Bridgeland, cultivated over sixty years. On Honolulu’s prime coastline, we hold sixty acres of beachfront parcels. We do not simply construct and sell units; we control entire undeveloped commercial and residential land banks citywide. We install utility grids and road networks, lease plots to homebuilders, and as residents flood in, we internally finance and develop our fully owned shopping malls, office towers, luxury apartments, and civic amenities.
Short-term Wall Street capital cannot comprehend these hyper-long-duration assets. Public REITs require rigid labeling, like pure office or pure residential portfolios, and must payout 90%+ of FFO as dividends, actively avoiding development. Howard Hughes pays zero dividends, continuously funding massive infrastructure and holdco developments, leaving it priced like a deeply discounted orphan stock.
Bryce & Ren: So you decided to package insurance float inside that ticker?
Bill Ackman: Precisely. Since media joked a decade ago I wanted to turn Howard Hughes into the next Berkshire, why not execute it?
Eighteen months ago, Pershing Square injected another $900 million directly into the corporation. We announced a comprehensive transformation: accelerate monetization of mature real estate holdings to recycle capital, and deploy injected proceeds to acquire Vantage, a fully mature insurer founded six years prior.
We recruited elite underwriting and claims leadership from the industry to manage policy origination, strictly cap liability exposure, and balance books. Our Pershing Square investment team then manages the incoming premium float.
We allocate roughly 60% of the float to zero-risk short-term Treasuries to satisfy liquidity obligations, and deploy the remaining ~40% into high-certainty compounding equities and premium assets. We rigorously enforce the iron law against casual share dilution.
Bryce & Ren: Why attach it to Howard Hughes instead of chartering a brand-new Pershing Insurance carrier from scratch?
Bill Ackman: Licensing approval and rebuilding industry credibility takes years. More importantly, Berkshire Hathaway’s resilience stems precisely from never being a monoculture insurer, but a highly diversified holding group.
Pure insurers cannot easily retreat when underwriting markets sour or rates lack attractiveness, lacking alternative revenue streams to sustain operations. A diversified holding platform anchored by core urban assets can actively contract underwriting volume during unfavorable cycles, redirecting capital to higher-yielding outlets. This structural configuration delivers unparalleled counter-cyclical resilience, AAA-caliber default mitigation, and acts as an ultimate black-swan moat.
5. Dinner Secrets and Mentor Imprints: Warren Buffett Goes 48 Years Without Water, and the True Commercial Moat
Bryce & Ren: Across your prolonged association with Warren Buffett, is there a private interaction that remains vividly etched in your memory or radically altered your worldview?
Bill Ackman: Years ago, I had the privilege of hosting Warren for dinner at my New York residence.
Everyone knows his Cherry Coke devotion, but that specific variant is impossible to find in standard grocery stores. I pre-ordered an entire pallet on Amazon ahead of time. As we sat at the table, I politely asked: Warren, would you prefer still or sparkling water?
He looked at me, smiled, and replied: Neither. Please bring me a Cherry Coke.
I chuckled and asked: You really consume zero plain water on a regular basis?
He stared intently and said: Bill, I haven’t had a single sip of water in forty-eight years.
Bryce & Ren: Forty-eight years without drinking water? That sounds utterly unbelievable!
Bill Ackman: Absolutely one hundred percent factual.
The story is comical, yet the underlying philosophy runs profoundly deep. People obsess over complex wellness regimens, yet Warren stands stage-center delivering eight hours of intense intellectual output at annual meetings without faltering. His longevity and acute cognition stem from dedicating his entire life to investing he passionately loves. His brain never ceases rapid, pure, joyful processing.
Throughout life and careers, possessing mentors you eternally look up to is monumental luck. Whenever I confront labyrinthine commercial dilemmas or investment crossroads, I pose one simple internal query: What would Warren Buffett do? Would he acquire this asset? If not, why?
In an increasingly noisy era, establishing this type of first-principles cognitive filter shields you from 99% of market noise and seduction.
6. Sector Spotlight: Hedge Fund Principal’s Verdict on Spotify, Weight-Loss Drugs, and Retail Investment Philosophy
Bryce & Ren: Closing out, we want to represent younger investors and listeners by pulling up several highly topical enterprises and requesting rapid assessment against rigorous hedge fund standards:
First, Spotify. Many compare it to Netflix within streaming, but it faces crippling royalty constraints from record labels. Your perspective?
Bill Ackman: Spotify is fascinating, but suffers a foundational business model chasm versus Netflix.
Netflix controls massive proprietary content libraries. Aging catalog yields near-zero marginal costs, generating staggering economies of scale and bargaining leverage. Spotify inherently functions as a pass-through distributor bottlenecked by the Big Three majors. Every track streamed mandates fixed-proportion royalty remittances to Universal, Sony, and Warner. Despite formidable podcast strategies and distribution networks, its terminal free cash flow architecture faces structurally heavier margin compression than Netflix’s.
Bryce & Ren: Second, Eli Lilly and Novo Nordisk, the blockbuster weight-loss drug titans sweeping global markets?
Bill Ackman: Colloquially, buying into GLP-1s amounts to long positioning the baseline demographics of global obesity.
Longitudinally, therapeutic benefits to public health are revolutionary, yet this diverges from Pershing Square’s preference. Pioneer drug R&D represents hyper-capital intensive, elongated-cycle ventures with notoriously unpredictable win rates. You commit billions and invest eight to ten years in trials, yet regulatory approval trajectories, patent cliff exposures, and homogenous competitor saturation harbor massive outcome variance. Many pharma conglomerates abandoned early discovery long ago, morphing into marketing-driven M&A vehicles. We gravitate toward businesses with transparent moats that virtually eliminate research-write-off risk profiles.
Bryce & Ren: Finally, to younger retail investors navigating inflation, AI disruption, and geopolitical fragmentation, what timeless core advice applies?
Bill Ackman: First, rigorously acknowledge the boundaries of your cognitive capacity. Only invest in straightforward, highly predictable quality enterprises enduring wide moats. Lacking individual security analysis expertise, systematic index tracking or owning weathered compounds like Berkshire Hathaway vastly outperforms chasing momentum in secondary markets.
Second, never underestimate compounding’s magnitude. Compounding presupposes absolute survival. Maintain pristine balance sheets, evade all instrumentality risking forced liquidation during volatility cycles. In volatile epochs, patience and discipline constitute the scarcest alpha.