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Bloomberg
Audio
Studios
podcasts,
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>> Hello
and
welcome
to
another
episode
of


the
All
Thoughts
Podcast.
I'm
Tracy


Aloway

>> and
I'm
Joe
Weisenthal.

>> Joe,

>> yes.

>> Have
you ever wanted to tour a data


center?

>> Uh,
I'd
love
to.
Um,

>> part
of
me
thinks
it
would
be
really


boring,
like
if
you
actually
went


inside,
cuz
it
would
just
be
a
bunch
of


the
same
cables
like
over
and
over
and


over
again,
but
part
of
me
thinks
just


seeing
the
scale
of
it
would
be
amazing.

You
know
what
I
would
do
if
I
tooured
a


data
center
is
I
would
look
at
those


cables
and
every
nut
and
bolt
and
vac


and
um
and
heating
thing
and
get
every


brand
name
I
could
on
any
little
piece


of
equipment
in
the
entire thing
and


then
see
are
there
any
of
these
that
are


AI
plays
that
the
market
doesn't
real


you
know
any
random
screwdriver
that's


being
used
in
this
operation
what
is
the


name
is
it
publicly
traded

>> so
literally
picks
and
shovels

>> yeah
just
lit
exactly
oh
here
is
here


there's
a
company
that
makes
the
um
you


know
the
doors
stop
is
are
they
an
AI


play
because
they're
going
to
need
a
lot


of
doors
stops
for
all
these
doors.


That's
what
I
would
do.

>> Okay.
So,
uh
I
guess
the
the
Joe
Hypers


scale
data
center
ETF
um
coming
to
a


market
near
you
eventually.
That
would


be
a
good
idea.

>> That's
a
great
idea.

>> Well,
today
we're
going
to
talk
about
uh


some
of
these
data
centers.
Yeah.
with


someone
who
has
actually
gone
on
a
field


trip
and
looked
at
them
and
then
we're


going
to
talk
about
broader
AI
because


of
course

>> with
markets
still
you
know
basically
at


records
there's
a
lot
of
concern
that


valuations
are
getting
out
of
hand
we've


had
these
financing
deals
which
just
do


my
head
in
in
terms
of
like
trying
to


track
who's
lending
to
who
and
who's


buying
from
who
and
all
of
that
so
we


should
talk
about
it

>> totally
because
I
mean
two
things
which


is
one
we
know
how
important
AI
is
to


the
stock
market
two,
you
know,
as


there's
all
these
sort
of
complicated


financing
deals
and
the
numbers
change


by
the
day.
So
just
today
we
got
news


that
in
the
latest
Open
AI
is
allowing


some
of
its
employees
to
sell
shares
at


a
half
a
trillion
dollar
valuation.
It


just
seems
like
it's
constant
fund


raise,
constant
numbers
that
go
higher


and
higher
and
higher
every
day.
Various


estimates
for
how
much
capital


expenditure
is
going
to
happen
in
this


cycle
seem
to
go
up.
I
feel
like
what
we


really
need
to
do
is
have
one
of
these


conversations
every
month
and
just
get


for
real
like
we
need
to
keep
uh
like
it


changes
so
fast
and
the
stakes
seem
so


high.

>> Yeah,
you
definitely
need
frequent


updates.
The
other
thing
of
course


hovering
in
the
background
is
the


importance
of
the
AI
buildout
to
the


overall
economy,
right?
And
this
is
the


question
like
is
the
I
think
Deutsche


Bank
actually
put
out
a
note
on
this.
Is


the
entire
US
economy
being
propped
up


by
AI
right
now?
Maybe
that's
not
a


problem
if
you
know
if
the
AI
stuff


actually
gets
built
and
materializes


into
real
money.
But
you
can
imagine
if


it
is
a
bubble
then
that
would
be
bad.

>> The
way
I
see
it
is
there's
essentially


two
ways
this
is
going
to
end
up.
One
is


it
turns
out
it
was
a
bubble
we
have
a


massive
recession
and
we
all
lose
our


jobs.
And
the
other
possibility
is
that


AI
is
not
a
bubble.
We
have
AGI
and
we


all
lose
our
jobs.
And
so
I'm
curious


which
of
the
two
paths
is
going
to


happen.
Well,
I
got
to
say
there
are


some
alternate
possibilities.
Did
you


see
the
uh
Dallas
Fed
chart?

>> Uh
I
haven't
seen
that
one.

>> So,
it
showed
GDP
per
capita
and
one


line
was
like
for
AGI
and
it
just
goes


straight
up.

>> Straight
up.
It
just
literally
vertical.

>> Yeah.
But
then
the
other
line
is
what
if


the
robots
take
over
the
world
and
kill


everyone
and
that
line
went
straight


down.

>> So,
yeah.
So,

>> okay.
Okay.

>> Lots
of
good
outcomes
here.

>> Yes.
All
right.
Uh
so
we
have
the


perfect
guest,
someone
we've
spoken
to


before,
uh
who
writes
absolutely


phenomenal
research
about
AI
and


actually
digs
into
literally
the
nuts


and
bolts
of
everything.
We're
going
to


be
speaking
with
James
Van
Gilan.
He
is


the
author
of
the
Catrini
newsletter.


James,
thanks
for
coming
back
on.

>> Thanks
for
having
me.
I
feel
like
uh
the


last
time
we
were
here,
we
were
also


discussing
whether
AI
is
a
bubble
or


not,
and
now
we
get
to
do
it
again.

>> One
day,
one
day
it'll
be
right.
Right.


Analysts
going
on
field
trips
is
one
of


my
favorite
genres
of
research.
Explain


to
us
how
you
managed
to
do
this.

>> So


drones
have
become
very
commoditized.


The
likelihood
of
anything
in
the
world


being
more
than
a
10
mile
radius
from


someone
with
a
drone
is
extremely
low.

>> And
we
kind
of
use
that
to
our
advantage


because
we've
been
sitting
in
front
of
a


screen
watching
green
numbers
go
up
and


up
and
up.
And
it's
not
my
fault
that


they
named
it
Stargate.
It
kind
of
lends


itself
to
not
taking
it
as
serious
as
as


one
otherwise
might.

>> And
someone
I
read
a
tweet
that
said,


"Well,
where's
the
proof?


There
probably
should
be
proof,
right?"

So,
we
looked
at
some
satellite
images


and
we
went,
"Okay,
a
year
ago
this
was


dirt
and
now
there's
this
thing
and
it's


the
size
of
lower
Manhattan."

>> Wow.

>> So,

>> it's
in
Texas,
right?

>> It's
in
Abalene,
Texas.
And
and
the
the


I
mean,
this
is
actually
one
of
the


smaller
ones.
I
mean,
if
you
look
at


Louisiana
Meta's
Hyperion,
it
would


start,
the
footprint
would
start
at
the


top
of
Central
Park
and
it
would
go
down


to
Soho.

>> Wow.

>> So,

>> that's
why
they
call
it
hypers
scale.

>> So,
just
to
be
clear
with
Stargate,
this


is
like
the
thing
that
like
Trump
and


Oracle
and
probably
SoftBank
is
in
the


middle.
Like,
what
is
this
complex?


Who's
behind
it?
This
thing
that
you


went
and
uh
toured
and
got
some
drone


footage
of.
So
it's
essentially
a
mix
of


um
you
know
Oracle,
OpenAI,
there's
some


involvement
from
Nvidia,
there's
Saudi


interest
with
MGX,
there
is
some


financing
involved
and
it
is
just
one
of


uh
currently
five
uh
data
centers
that


are
planned
with
a
half
a
trillion


dollars
of
investment.
That's
why
we


went
and
looked
at
it
because
when
you


really
think
about
it,
this
represents


probably
the
largest
infrastructure


buildout
and
effort
since
World
War
II.

>> Where
are
they
getting
the
energy
from?

>> So,
that's
the
that's
the
best
part.


That
was
the
first
thing
we
saw
in
the


drone
is
you
fly
over
it

>> and
they
just
built
their
own
natural


gas
plant

>> and
going
like
Joe,
great
idea.
just


going
and
looking
at
all
the
but
you
got


to
look
at
the
big
stuff
too,
right?
And


and
without
uh

>> I
mean
without
power
these
are
just
kind


of
you
know
hunks
of
metal.
So

you
have
outside
of
Stargate
Avalene
10


natural
gas
turbines
and
the
interesting


thing
is
these
aren't
like
the
really


good
natural
gas
turbines
because
if
you


wanted
so
natural
gas
turbines
follow


along
simple
cycle
combined
cycle
these


are
simple
cycle
they're
each
35


megawatt
which
is
very
much
on
the
lower


end
uh
half
of
them
are
from
G
Vernova


half
of
them
are
from
Caterpillar
a


company
that
Caterpillar
owns
called


solar
turbines
and
the
reason
why


they're
not
you
would
think
oh
you're


spending
half
a
trillion
dollars
on


these
things,
you
could
probably
get
the


best
thing
ever,
but
that'll
take
you


seven
years.

>> Oh,
right.
Because
there's
a
there's
a


natural
gas
turbine
Yeah.
shortage.
By


the
way,
there's
a
headline
speak.
So,


there's
a
headline,
an
article
on
the


Bloomberg
today
by
Matthew
Griffin.
The


hunt
for
winners
in
the
artificial


intelligence
gold
rush
has
landed
on
an


unlikely
target.
Oldline
industrial


equipment
maker
Caterpillar
Inc.
So,
you


got
to
look
at
every
one
of
these
brands


that's
uh
supplying
it.
And
Caterpillar


is
up
a
lot
or
it's
up
today
and
the


stock
is
uh
done
very
well.
So,
okay,


Caterpillar,
who
else?
What
are
some
of


the
What
else
do
you
see
besides
these


big
turbines
when
you
go
out
and
tour


this
facility?

>> So,

>> oh,
this
stock
is
a
rocket.
So,
that's


at
40.

>> You
see
any
people
like
security
guards?

>> So
many
people,

>> huh?

>> And
I
mean,
it's
there.

>> I
don't
know.
you've
seen
like
Silicon


Valley
and
there's
that
scene
where


there's
like
one
guy
in
the
data
center


and
he's
like,
"Yeah,
you
know,
night


and
day
don't
really
matter
much
down


here
and
it's
just
one
guy
running."
But

>> in
the
buildout,
I
mean,
there
are
every


single
HVAC
technician
or
guy
that
knows


how
to
lay
fiber
or
guy
that
knows


electrical
or
plumbing.
Uh


within
a
100
mile
radius
of
Abene,
those


are
they're
all
there,
right?
There's


7,000
people
working
on
building
this


and
this
is
just
one
site.
And
uh
yeah,

>> so
people
have
been
talking
about
the


picks
and
shovels
fa
phase
of
AI


investment
for
a
while
now,
but
it
seems


like
stuff
is
still
getting
built
and
it


has
further
to
run.
my
kind
of
favorite


we
can
you
know
and
I'm
sure
we
will


discuss
whether
this
is
a
bubble
or
not


but
at
the
end
of
the
day
the
money
is


getting
spent
and
my
favorite
kind
of


setup
in
the
market
is
you
have


something
that
has
a
multiple
that


reflects
kind
of
a
wrong
reality
or


doesn't
really
fully
integrate
a
secular


theme
and
then
you
have
a
cycle
that's


really
bad.
So
whether
it's
kind
of
the


robotic
supply
chain
goes
throughout
the


automotive
cycle
and
if
you
guys
are


aware
that's
been
a
nightmare.
Uh
and


then
you
have
some
of
these
a
lot
of


these
companies
took
really
significant


draw
downs
when
Trump
got
elected

>> because
uh
the

>> this
isn't
really
tech
capex.
It's
much


more
similar
to
like
LG
terminal
capex

>> that
kind
of
entails
the
same
companies


that
were
benefiting
from
the
IRA.
Oh,


interesting.

>> So,
everyone
sold
them
and
now
it
turns


out
it's
kind
of
like
the
horseshoe


theory,
right?
You
can

>> No,
that's
super
interesting.
Like,
it's


just
these
sort
of
like
oldline


industrials
and
they
did
very
well
under


the
Obama
administration
because
of
all


the
factories
and
all
that
stuff
that
we


talked
about
and
then
it's
like,
okay,


we're
pulling
the
plug
on
this,
but
now


there's
just
this
title
wave
of
money.


By
the
way,
Caterpillar
was
a
$334
stock


on
April
2nd,
right
before
Liberation


Day,
which
is
sort
of
where
we
should


benchmark
things.
now
486
at
an
all-time


high.
What
are
some
of
the
other


companies
you
see
out
there?
No,
for


real,
like

>> preferably
the
ones
that
haven't
gone
up


yet,
right?

>> Yeah.
Well,
but
seriously,
like
who
else


is
uh
who
else
is
getting
a
piece
of


this
action?

>> So,
uh
something
that
I
want
to
make


sure
I
mention
just
to
frame
this
whole


thing,
uh
if
you
look
at
the
building


site
plans,
they
have
the
names
of
all


the
data
halls
and
they
are
literally


each
called
Ludicrous
Building.
So,
it's


Ludicrous
Building
One,
Ludicrous


Building
Two.
Wait,
is
it
Ludicrous
with


a
K?

>> No.

>> Oh,
that
would
be
great.

>> I
mean,
Ludicrous
spelled
correctly
is


also
fantastic,
but

>> uh
the
compet
I
mean


really
I
would
encourage
anyone
to
go


and
look
at
this
video
because
the
the


it's
it's
just
a
there
is
such
a


disconnect
between


looking
at
green
numbers
going
up
like


like
caterpillar
going
you
okay
cool.


Yeah.
And
then
you
see
it
and
it
is


mind-blowing.
I
mean
they
have
rows
of


uh
dry
and
adiatic
coolers
that
are
you


know
hundreds
and
hundreds
for
the


liquid
cooling
loops

>> and
then
you
have
uh
the
kind
of
uh
all


the
HVAC
the
power
generation


transmission.

>> We
compiled
a
list
of
basically


200
companies
50
of
which
were
high


confidence
in
in
kind
of
seeing
as
part


of
this
buildout.
And
the
interesting


thing
is
you
have
these
multinational


OEMs.


The
scale
of
this
project
is
so
large


that
you
can
call
one
of
them
and
say


okay
we
want
to
go
with
uh
you
know
uh


Mitsubishi
heavy
or
we
want
to
use
uh


eaten
for
for
this
thing
and
they
will


say
yeah
okay
well
we
can
do
60%
of
it.

>> I
mean
it
it
the
biggest
companies
in


the
world
are
are
yeah

>> they're
just
fighting
they
don't
have
to


fight
with
each
other
because
the
pie
is


so
big.
how
scarce,
you
know,
there's


all
this
um
around
the
country
there's


been
all
this
tension
like
is
there


going
to
be
enough
energy
for
data


centers?
What
about
the
water?
What


about
the
politics?
People
we
see
these


uh
town
halls
where
the
locals
still


want
a
data
center.
How
scarce
are


locations
like
Abolene?
I
mean,
there's


a
lot
of
empty
space
in
Texas.
Could
you


see
are
there
more
Stargates
or
more


Abalines
out
there
waiting
where
the


companies
can
just
say,
you
know
what,


we're
just
going
to
build
our
own


infrastructure.
we're
going
to
build
our


own
natural
gas
plant
and
we're
just


going
to
do
it
in
the
desert
in
Texas


where
we
don't
have
to
worry
about


nimbies
or
local
politics
or
anything.


Is
that
the
future
for
a
lot
of
this


stuff?

>> Yeah,
there's
already
another
uh


facility
that's

planned
in
Shackleford,


Texas,
which
is
not
too
far
from


Abalene.
Abalene
is
already
planning
on


expanding
by
another
600
megawatts.
I


mean,
that's
how
we're
measuring
data


centers
now
is
is
just
in
megawatts
and


gigawatts.
Uh
in
Louisiana,
that's
where


Meta
is
building
Hyperion.
you
have
uh


some
uh
unidentified
or
unannounced


Midwest
facility
that'll
probably
be
in


Ohio.
Uh
basically,
yeah,
anywhere
that


you
can
get
the
gas,
anywhere
you
can


get
the
power,
anywhere
that
there's
the


land.
Uh
there
was
one
planned
in


Indianapolis.
And
it's
interesting
you


bring
up
water
cuz
we
wrote
about
water


a
little
while
ago
as
well,
and
we
were


basing
our
projections
off
of
what
the


water
consumption
of
like
existing
data


centers
were.
The
advancements
in
liquid


cooling
have
changed
that
a
lot.
So


there
was
a
huge
kind
of
uproar
about


well
this
data
center
is
going
to
use
so


much
water
and
if
you
look
at
it
this


was
in
Indianapolis
and
if
you
look
at


it
it's
about
the
same
amount
of
water


as
a
thousand
households
because
it's


all
closed
loop
liquid
cooling
now
the


water
just
gets
recycled
and
and


filtered
back.
So,

it's
really
just
something
where
the


constraint
is
still
power
and
getting


these
kind
of
turbines
and
it's
and
and


it's
going
to
increasingly
become
a


thing
where
it's
behind
the
meter
power


generation.

>> They're
just
going
to
build
their
own


power
plants.
They're
not
going
to
rely


on
the
grid.
You
guys
remember
what


happened
in
Texas
in
21
with
Erica?


Yeah.
They
you
cannot
underwrite
that
as


a
data
center.

>> Like
uh
you
you
just
can't
be
offline.

So


that's
kind
of
where
we're
headed
is


this
power
and
energy
kind
of
bottleneck


is
the
bottleneck.
The
mo
one
of
the


more
interesting
things
we
ran
across
is


you
look
at
XAI's
data
center
and
we


went
through
a
lot
of
the
filings
of
all


these
different
data
centers.
are


permitted
for
15
35
megawatt
turbines

>> and
there's
thermal
imaging
of
the
site


that
shows
they're
using
35

>> H
gnova
another
one
that
was
a
330

>> you're
just
typing
tickers.

>> Yeah,
that
was
a
$330
stock
on
April


2nd.
That's
a
$69
stock.
So
check
out


Seaman's
Energy.

>> Thank
you,
Joe.
Oh,
he's
he's
doing
it.

>> You
could
you
could
keep
going.

>> All
right.
Um
I
have
kind
of
this
isn't


an
essential
question,
but

>> Okay,
wait.
I
got
it.


Hey,
Sean.
I
knew
this
was
going
to


happen.
I
know.
Seaman's
Energy
was
a


$56
stock
on
April
2nd.
That's
108.


That's
a
straight
lineup.
Okay.

>> Okay.
Clearly,
someone's
making
money.

>> Yeah.

[Music]

Like
how
big
are
the
walls
of
these


things?
And
what
does
security
actually


look
like?
Because,
you
know,
we
talk


about
people
being
upset
about
higher


energy
prices.
I
understand
that
maybe


some
of
the
some
of
them
are
building


out
their
own
energy
capacity,
but
you


know,
in
a
populist
mindset,
people


might
still
be
upset
at
AI.
Still
upset


that
AI
is
going
to
take
jobs
and
things


like
that.
They
could
become
targets,


right?

>> Yeah,
absolutely.
I
I
I
mean,
apparently


security
isn't
tight
enough
to
shoot


down
a
drone
yet.

>> Oh,
of
course.
Yeah.
But
when
you
talk


about
the
walls,
like
the
interesting


thing
is
everything
in
this
data
center


has
you
can't
just
build
it
like
a


house.

>> Everything
needs
to
have
the
right,
you


know,
anti-corrosion,
uh,
insulation.


You
can't
just
be
losing
heat.
You're


already
spending
so
much
money
on


cooling.
So
everything
in
the
building


envelope
is
also
kind
of
the
most


expensive
thing
it
could
be.

>> And
I
assume
it's
like
a
sealed


envelope,
I
guess.

>> Yeah,
exactly.
and
and
uh
the


the
opportunity
of
just


how
how
big
is
this
going
to
be
if
you


actually
believe
the
the
the
people
that


are
building
this
uh
and
this
is
kind
of


an
interesting
dynamic
of
the


hyperscalers
are
in
somewhat
of
a


prisoner's
dilemma.
We
can't
speak
to


whether
they
actually
uh
believe
or
not,


but
the
party
line
is
we're
building


machine
God.

>> And
if
we're
building
machine
God,
then


that's
kind
of
a
religious
zealatry.
So


uh
3
years
ago
most
of
these


hyperscalers
were
making
net
zero
by


2030.
Uh
that
is
not
happening.
There's


no
way
that's
happening.
Uh
maybe
they


buy
carbon
off
it
but
that's
not


happening
because
if
you
need
to
do
it


now
you're
using
natural
gas.

>> And


then
you
say
well
once
we
create
machine


God
machine
God
will
fix
it

>> right

>> and
you
can
justify
a
lot
of
stuff.

>> Wait.
Okay.
So,
let's
talk
about
is
AI


in
a
bubble?
Cuz
when
when
we're


conversing
about
buildings
that
are


literally
called
Ludicrous
and
we're


talking
about
machine
God
will
solve
all


our
problems,
sounds
a
little
bubbly.

>> Yeah,
that's
the
kind
of
stuff
you
look


back
on
and
say,
"Oh,
yeah,
that
was
the


top."

>> I
know
that
we
we
have
to
talk
about


this
and
that
requires
some
numbers,
so


I
have
some
notes.
But
the
interesting
I


mean
you
can
make
a
case
for
either
side


and
it
kind
of
hinges
on


not
so
much
what
AI
looks
like
in
the


future
but
more
where
we
are
in
the


cycle.
If
the
question
is
is
AI
a


bubble?
Yeah,
probably.
It's
a
new


technology.
It's
exciting.
Every
single


time
we've
the
railroads,
the
you
know


com


if
it's
not
a
bubble,
it
will
be
and
it


probably
is
already.

>> But
where
are
we
in
the
bubble?
That's


the
interesting
thing
for
investors.
So


if
you
look
at
kind
of

where
are
we
in
the
financing
side?
When


we
had
the.com
bubble,
the
big
thing
uh


are
you
guys
familiar
with
dark
fiber?

>> No.

>> So
essentially
they
were
building
out


this
kind
of
infrastructure
for
the


internet
and
uh
the
the
conviction
of


the
day
was
the
internet's
going
to
be


the
biggest
thing
in
the
world.
Correct.


And
97%
of
the
fiber
that
was
laid
was


called
dark
fiber
because
it
wasn't
lit


up.
It
was
just
laying
there
because


eventually
we're
going
to
need
it.


That's
not
the
case
right
now.
Every


single
time
that
one
of
these
data


centers
comes
online,
you're
at
100%


utilization.
There's
no
dark
fiber.
And


we're
continuing
to
need
more.
I
mean,
I


don't
know if
you
guys
saw
Sora
2,
more


than
70%
of
the
content
that
we
consume


is
video.

>> So,
a
video
model
makes
a
lot
of
sense.


It's
also
way
more
computensive.

And
the
the
final
form
of
chat
AI
is
not


chat
bots.
It's
going
to
be
video.
It's


going
to
be
robotics
which
use
video


models.
So
that's
kind
of
like
the
the


bullish
side,
but
I
totally
see
I
have


some
numbers
here.
So
we've
had
some
of


these
circular
deals.
Um

>> and
uh

>> so
far
I
mean


there's
hundreds
of
billions
of
dollars


for
this.
Most
of
the
financing
is


structured
much
more
like
toll
roads
or


or
LG
terminals.
The
Meta
Hyperion
was


$29
billion.
uh
26
billion
of
that
was


PIMCO
on
debt
and
then
Blue
Owl
with
3


billion
of
equity.
An
offbalance
sheet


arrangement
which
also
was
pretty


popular
during
the
com
bubble.
Then
you


have
stuff
like
GPU
collateralized
SPVS.


Coreweave
has
a
7.5
billion
Blackstone


SPV.
There's
like
an
11
billion
dollar


GPUbacked
loan
market
now
which


compared
to
the
the
infrastructure
thing


I
can
get
the
that
it's
like
those
GPUs


are
going
to
be
worth
like
they
will


depreciate.
So

>> that's
that's
ABS,
right?
That's
like


asset
back
securities.
Okay.

>> Yeah.
But
when
you
look
at
the
where
we


just
saying
where
are
we
in
the
cycle?


Well,

>> there's
been
there's
been
a
lot
of
these


off
balance
sheet
arrangements.
But
in


terms
of
that
prisoners
dilemma
that
we


spoke
about
where
nobody's
going
to
back


off
because
then
maybe
they
risk
not


creating
machine
God.
The
debt
to
equity


ratio
on
most
of
the
hyperscalers
is
not


crazy.
Sure,

>> Oracle
has
the
highest
and
but
they


still
have
a
lot
of
room
to
lever
up
in


pursuit
of
this
goal.
The
interesting


kind
of
dynamic
of
Nvidia
finances
its


customers
and
then
its
customers
buy


Nvidia
GPUs
and
then
you
know
that
yeah


that's
a
bubble
dynamic
that's
that's


visible
circular
financing
and
and
but


the
demand
is
real.
Well,
this
is
my


this
is
I
guess
the
question.
If
the


demand
is
real,
why
are
the
Nvidia
of


the
world
financing
their
customers,


right?
Intuitively,
you
think,
okay,


Nvidia's
the
demand
for
chips
is
maxed


out,
right?
Then
intuitively,
you
think,


well,
then
there's
plenty
of
money


elsewhere.
So,
do
you
have
a
uh
guess


for
why
Nvidia
is
impelled
to,
you
know,


invest
in
OpenAI,
invest
in
Corewave?


It's
been
a
long
time
investor
in


Cororeweave
and
so
forth.
Yeah,
I
I


could
I
could
take
the
very
skeptical


view
or
the
kind
of
not
skeptical
view.


The
not
skeptical
view
is
the
best
thing


for
Nvidia
is
that
we
accomplish
AGI.


So,
anything
that
it
can
do
to
get
us


closer
to
that
massive
massive


infrastructure
that's
required
for
that


is
great
for
them

>> as
quickly
as
possible.

>> As
quickly
as
possible
because
uh
every


year
that
you
don't
achieve
AGI
becomes


less
likely.
So,
uh,
that
is
maybe
the


core
factor.
And
then
there's

>> it's
good
for
for
them
and,
uh,
the
the


and
playing
into
that

>> the
because
this
this
isn't
necessarily


like
the
dot
bubble
because
the.com


bubble
had
fiber
and
then
it
had,
you


know,
pets.com
and
and
Amazon
and
all


that
stuff.
This
is
all
pretty
much


capex,
right?
Tech
is
capital
intensive


again,
which
means
that
it's
the
bust


won't
necessarily
be
like
the.com
bubble


where
it
gives
the
real
players
time
to


shine.
If
the
capex
spending
grinds
to
a


halt
because
the
market
goes
down,


that's
the
worst
thing
in
the
world.
So,


in
a
way,
it's
also
it's
in
their


interest
obviously
to
make
sure
that


that
doesn't
happen.

Another


[Music]


question
actually
but
and
I
want
to
ask


it
now
because
I
might
forget.
Um
there


was
a
headline
I
think
earlier
this
week


again
headlines
almost
every
day.
Can


you
explain
why
Meta
which
is
building


out
which
obviously
hyperscaler
they


have
tons
of
data
center
capacity.
Why


do
they
need
to
do
a
deal
with


coreweave?
So
I
saw
that
meta
is
going


to
uh
pay
a
few
bill
14
billion
some


number
for
capacity
on
core.
What
can


the
what
do
the
neoclouds
bring
to
the


table
such
that
the
legacy
is
like
you


know what
we
we
want
some
of
your


capacity?

>> It's
basically
I
would
say


anything
you
can
do
to
shift
that
capex


away
from
yourself
is
is
great.
Right?


If
if
you're
if
you're
right
now
a
lot


of
this
stuff
is
funded
from
cash
flow


and
yeah,
we're
starting
to
see
debt


financing
take
its
place,
but


if
you
the
the
you're
running
a
company


that's
existed
for
a
while
and
is
one
of


the
biggest
companies
in
the
world
and


yes,
you
could
justify
taking
inordinate


amount
amounts
of
risk
to
do
this,
but


just
like
anyone
else,
if
you
have
a


goal
and
you
can
kind
of
shift
away
some


of
that
risk
to
because
if
you
know,
if


Cororeweave
goes
bankrupt,
Meta's
not


it's
not
it's
not
the
worst
thing
in
the


world
for
Meta.
What
would
you
be


looking
out
for
for
signs
of
the
bubble


bursting
or
I
guess
the
capex
um
faucet


starting
to
turn
off?

>> So,
in
terms
of
like
the
uh
warning


signs
first,
monitoring
used
GPU
prices,


I
think
is
a
great
way
to
to
see
what's


going
on.
Seeing
like
contract


renegotiations,
waiver
headlines
from


private
credit,
and
also
a
big
one
would


be
any
delays
in
delivering
power.
uh


make
it
so
that
you
finance
this
thing


and
then
it's
not
going
to
be
able
to


work

>> right.
I
do
think
that
another
in
you


really
do
have
to
kind
of
index
to
the


revenue
that's
being
generated
by
the
AI


companies
as
well.
And
I
don't
you
saw


OpenAI
recently
announced
that
they're


uh
basically
allowing
you
to
buy
things


with
one
click
from
the
inside
the
app.


Mhm.

>> And
I
think
that
that
was
also
a
big
uh


driving
factor
in
the
router
where
they


kind
of
route
your
model
to
the
it's


it's
it's
setting
it
up
for
advertising


cuz
the
other
day
I
asked
Google
a


pretty
simple
question
and
it
just
gave


me
the
answer

>> with
no
advertisements
delivered
to
me.


So
we
need
to
I
think
that
there
is
the


killer
apps
kind
of
are
here
or
coming


but
that
has
to
happen
fast.

>> Yeah.
the
um
the
fact
that
the
internet


kind
of
runs
on
ads
is
an


underappreciated


reality
of
our
world
and
we
did
an


episode
on
it
way
way
back
in
the
day.


Is
there
any
way
if
I
wanted
to
get


exposure
to
like
the
good
stuff
of
AI,


the
actual
money
being
spent,
but
then
I


don't
like
all
the
circular
financing


arrangements.
Is
there
a
way
to
hedge


that
particular
risk?

Yeah,
you
could
uh


you
could
uh
buy
all
the
real
companies


that
are
building
this
kind
of
uh
data


center
and
then
you
could
short
Blue
Owl


and
the
private
credit
companies
that


are
doing
the
kind
of
uh
financing


aspect
of
it
because
if
it
goes
bad,


they
have
limited
upside
and
kind
of


unlimited
downside.
And
if
it
continues


happening,
the
companies
that
are


actually
building
it
have
unlimited


upside
and
they're
still
like
you
said,


these
old
line
uh
kind
of
industrial


that
like
they
still
have
a
core


business
to
go
back
to.

What's
your
take


on
so
OpenAI
announced
its
new
Sora


thing
that
Tracy
has
a
code
for.
Meta


announced
its
Meta
AI
which
a
lot
of


people's
like
this
is
slop
and
I
don't


we
don't
need
to
get
into
a
debate
about


whether
this
is
all
garbage.
I
kind
of


think
it
is
but
that's
not
actually
the


question
I'm
interested
in.
The
question


I'm
interested
in
is
one
way
to
view


these
things
is
you
know
what
these
are


going
to
be
these
video
these
AI
videos


are
going
to
be
really
important
sort
of


business
revenue
drivers
in
our
pursuit


to
AGI
and
the
other
view
is
look
if


they
were
close
to
AGI
they
would
not
be


devoting
time
to
the
slot
factories
and


this
is
the
sort
of
question
and
I'm


curious
from
your
perspective
what
do


you
think
is
the
real
logic
behind
all


of
this
effort
to
create
these
sort
of


you
know
dumb
like
oh
a
video
of
a


astron
not
riding
a
horse
through
space


with
a,
you
know,
cowboy
hat
on
or


whatever.

>> Video
models
are
going
to
become
the


most
important
part
of
this.
You
uh
you


need,
for
example,
LLMs
don't
really


interact
with
the
world,

>> but
we're
starting
to
see
in
robotics
AI


models
interact
with
the
world.
So
you


have
these
video
language
action
models


and
you
can
structure
it
so
that
there


was
a
interesting
paper
on
archive


recently
that
uh
and
you
know
this
is
uh


video
models
like
V3
are
emergent


zerosot
learners
and
understanders
and


what
that
just
means
is
you
can
give
it


uh
basically
like
a
second
of
context


and
then
it
can
extrapolate
about
what's


going
on
beyond
that
becomes
extremely


important
for
robotics
and
you
can


structure
these
vision
language
action


models
where
you
have
uh
like
a
slow


reasoning
model
that
is
kind
of
like


your
conscious
mind
and
determines
what


it
needs
to
do
and
then
you
have
like
a


fast
model
that
actually
does
the


movements
and
stuff.
AI
kind
of
extends


into
the
realm
of

you
need
to
generate
as
much
data
as


possible
and
having,
you
know,
video


data
and
knowing
what's
good
and
what's


bad
is
also
very
important.
But
yeah,
to


your
question,
Open
AI
probably
does


want
to
show
that
they're
making
more


money.
And
I
don't
doubt
that
there
are


people
there
that
truly
believe
that


they're
building
the
machine
god.
And
I


also
don't
doubt
that
they
realize
if


they
to
have
a
shot
at
doing
that,
they


need
the
market
to
play
along
and
they


need
to
keep
growing
their
revenues.
So


I
think
there's
a
lot
of
really
good


counterarguments
about
like
not


necessarily
are
we
in
a
bubble?
Yes.
Uh


is
the
bubble
over?
Like
there
are
good


arguments
for
that.
I
don't
think
one
of


the
I
don't
think
that
oh
well
they're


leaning
into
like
kind
of
this
slops


that
you
know
it's
a
company.
They're


going
to
do
whatever
they
can
to
make


money.
That's
capitalism.

>> Um,
you
know,
one
of
the
things
I
think


about
another
reality
of
our
current


time,
this
is
kind
of
related,
but
if


we're
talking
about
video
data,
YouTube


staying
power
has
been
like
phenomenal,


right?
It's
been
around
for
decades
now,


and
we
haven't
really
seen
any


successful
competitors.

>> Anyway,

>> well,
since
uh
we
wanted
to
talk
about


stocks
that
are
going
up,
I
I
know

>> that's
another
one.

Uh


people
kind
of
forgot
that
video
takes


up
a
lot
more
storage
than
text
does.


And
if
we're
going
to
start
just
like


throwing
out
the
slop
on
video,
the
part


basically
one
of
the
only
areas
of


semiconductors
that
has
gotten
ignored


has
been
storage.
Not
like
not
like


memory
like
like
uh
RAM
and
stuff,
but


like
hard
drives
and
solid
state
discs


like
Western
Digital
and
uh
you
know.

>> Okay.
So
Seagate.

>> Yeah.

>> That's
what
we're
talking
about.
So
this


was
a
this
was
a
$84
stock
in
late
March


and
now
it's
a
254.
That's
where
you're


going,
right?
Okay.

>> Yeah.
And
yeah,
there's
a
crazy
there's


a
crazy
chart,

>> but
it
has
gotten
attention,
but
you


think
it
could
go
up
more.

>> I
think
so.
And
I
think
that
uh
to


illustrate
that
dynamic
that's
going
to


keep
happening.
Basically,
you
just
keep


looking
at
stuff
where
there's
people


say,
"Oh,
well,
you
know,
there's
a


there's
a
glut
of
X
and
that's
why
this


isn't
going
to
win
from
AI."
And
then


eventually
the
glut
of
X
doesn't
matter.


It's
a
that
that's
what
happened
to


Nvidia
in
the
beginning
of
all
this.


There
was
a
glut
of
crypto
GPUs
and
now


nobody
car
like
when's
the
last
time
you


heard
someone
bearish
on
Nvidia
because


there's
too
many
crypto
miners.

>> SanDisk
was
$48
in
April
2nd.
That's


$126
stock.
Pretty
crazy.
These
are
just


these
are
like
just
the
tools
are
just


store
just
basic.
Yeah.

>> Yeah.
Crazy.

>> and
uh
you
start
to
get
worried
when


everybody
just
goes
into
the
Cisco
of
it


all.
But
these
are
real
companies
that


have
real
products.
Of
course,
there's


some
silly
stuff
that's
happening,
but


it's
not
only
silly
stuff.
It's
not
2021


with
the,
you
know,

>> yeah,

>> I
don't
need
to.

>> So,
speaking
of
on
the
ground
research,


or
maybe
I
should
say
in
the
sky


research.
When
it
comes
to
robotics,
you


had
a
robot
dog,
right?
One
of
those


like
really
advanced
ones.

>> We
got
a
unitry
robot
dog.
It
is
super


impressive.
It's
also
incredibly
creepy


when
it
stands
up
on
its
hind
legs.

>> Yeah.
Have
you
seen
the
video?

>> Yeah,
I
saw
your
video
of
it.
Yeah.

>> It's
uh
and


Unitry.
We
went
and
visited
Unitry,
too.


And
it's
I've
seen
Boston
Dynamics
uh


you
know,
spot
robot,
which
is
actually


more
impressive.
Also
could
probably


murder
you
like
and
and
the
interesting


thing
about
Unitry
is
yeah,
this
the


robot
kind
of
feels
like
a
weapon.
It's


very
heavy
and
stuff,
but
it's
even


they're
humanoid
like
it
can't
lift
more


than
8
pounds.
And
also,
Unitry
is
not


focused
on
like
making
the
brain.
They


just
want
to
make
the
hardware.
And
you


go
there
and

they
were
like,
"Where's
your
LAR
from?"


Oh,
well,
we
needed
this
specific
thing,


so
we
just
made
it
ourselves.

>> H

>> Okay.
Where
what
about
your
actuators?


Well,
we
made
those
ourselves,
too.


Anything
that
they
don't
make


themselves,
they
get
within
a
90
km


radius
of
their
headquarters.

>> Wait,
where's
their
headquarters?
It's


in
uh
Hanghao.

>> Nice.

>> So,
it's
something
where
you're
really


that's
the
competition
that
we
have


stacked
up
against
us
in
the
US
versus


China.
And

>> I
think
the
interesting
route
that


they've
taken
is

>> it's
super
advanced.
You
can
code
on
it.


You
can
you
can
already
see
videos
of


people,
you
know,
buying
them
and
making


them
do
specific
things.
But
they
made


them
not
super
like
it's
not
going
to


kill
you.
And
that's
a
great
way
to
get


a
bunch
of
training
data
because
we


don't
have
enough
training
data
of
what


it's
like
to
move
around
the
world.
We


have
the
sum
history
of
all
human


knowledge
that's
been
recorded
for
text


models,
but
we
need
more
data
for


robotics.
And
I
think
that
that's
like


an
interesting
kind
of
thing
where


they're
just
kind
of
sending
these
out


into
the
world
so
that
they
can
get


enough
data
to
actually
make
it
safe


enough
to
have
a
robot
in
your
house.