00:56:44 · John Coogan, Jordi Hays, Tyler
[00:56:44] S0: But the next line is is with the one I was laughing at. [00:56:47] S1: This While David Getta DJ, the Blue Owl executives cut a deal to acquire IPI Partners, an investment firm that owned and operated big data centers for Amazon and Microsoft. Blue Owl already had close ties with the organizer of The Treat, Iconic Capital, which manages the personal fortunes of Silicon Valley Elite, including Zuckerberg, and was a part owner of IPI. [00:57:08] S0: Okay. Let's go to Tyler. [00:57:09] S2: They own the Tampa Bay Lightning. [00:57:11] S0: Do they spend a lot of time [00:57:13] S1: in Tampa Bay? Is that a is that like a an a NHL team? [00:57:18] S0: Yes. NHL team in Florida. That feels like an odd [00:57:23] S1: That's gotta be I mean [00:57:24] S0: I feel like Tampa is [00:57:25] S1: Just trying to keep the ice. [00:57:26] S0: I feel like a lot of the hedge fund guys, they're on the other side of the peninsula. Right? Like, aren't they in, the Key West and Mar A Lago area or Palm Beach or Miami? Like, see or maybe they just fly in and out. Like, I don't know. It's just it's just it feels like I would I would love to know more about how they selected that particular team and that sport even.
00:57:47 · Jordi Hays, Luca Ferrari
[00:57:47] S1: Yeah. The purchase gave BlueOwl a seat at the table to bid on mega AI financing. Let's give it up for mega AI Not long after, it got arranged it got picked to arrange a $14,000,000,000 package for an Oracle and OpenAI data center in Abilene, Texas. Then last month, BlueOwl raised about 30,000,000,000 to build an AI data center for Meta in Louisiana, putting in 3,000,000,000 of its client's money and borrowing the rest. So the the lender is is is borrowing in addition to their LP's dollars. The deal included a provision considered extraordinary on Wall Street giving Blue Owl's equity investment a debt like guarantee in case the partnership falls apart, showing the new financial wizardry bankers are conjuring to meet AI's ravenous financial demand. Let's give it up for financial wizardry. We love wizardry. Spreading the risk. Silicon Valley's biggest players are flushed with cash and are able to fund much of the initial AI build out from their own coffers. As the dollar figures climb ever higher, they're turning to debt and private equity, spreading the risk and potential rewards more broadly across the economy. Some of the financing is coming from plain vanilla corporate bond sales, but financiers are making far bigger fees off giant private deals. Virtually every Wall Street player is angling to get a piece of the action from banks such as JPMorgan and Morgan Stanley to traditional asset managers like BlackRock. [00:59:10] S5: Before we go
00:59:10 · Luca Ferrari, John Coogan, John Tennant, Jordi Hays
[00:59:10] S5: Before we go [00:59:10] S0: on, let me tell you about Fall, generative media platform for developers. The world's best generative image, video, and audio models all in one place, developing fine tune models with serverless GPUs and on demand clusters. [00:59:19] S4: Continue, [00:59:19] S1: Jordan. Investor appetite for data center debt is so strong that some money managers have booked billion dollar gains in a matter of days. Let's give it up for booking billion dollar gains [00:59:28] S0: in Even a matter of before construction of these facilities, are financing. I mean, we talked about we we we talked about this [00:59:36] S1: where Inserting. [00:59:38] S0: Money management [00:59:39] S1: It's almost like, you know, people say there's no such thing as free money, but kinda seems like could be in a kind of a free money situation here. [00:59:50] S0: I think you gotta you gotta do something pretty Anyways, here's wind up at the iconic
00:59:50 · John Coogan, Jordi Hays, Tyler
[00:59:50] S0: I think you gotta you gotta do something pretty Anyways, here's wind up at the iconic [00:59:56] S1: Here's the catch. Still, the longer term performance is hardly assured. Big tech companies are expected to spend nearly 3,000,000,000,000 on AI through 2028 Mhmm. But only generate enough cash to cover half that tap according to analysts at Morgan Stanley. Big names in the finance world, such as Goldman Sachs CEO David Solomon, are warning about AI fueled froth in the markets and in capital spending. At the same time, the fear of missing out is real. Days after Solomon voiced his concerns to analysts, Goldman formed a new team in its banking and markets group focused on AI infrastructure financing. They are getting into the game. [01:00:29] S0: What do you say? What we do know for certain is that the big tech companies that wanted the world to spend trillions have huge financial incentives to be believers. If you haven't noticed, Wall Street is also being paid a lot to promote the story. Greenlight Capital, the hedge fund firm run by David Einhorn wrote in an October letter to investors. So how will [01:00:53] S1: And this is this is the line that stood out the most to me like on the West Coast Yes. You have [01:00:57] S0: the labs Yes. [01:00:58] S1: Which are effectively every single person as well as the investors [01:01:02] S2: Yes.
01:01:02 · Tyler, Jordi Hays
[01:01:02] S2: Yes. [01:01:03] S1: Are incentivized to keep keep the the current, you know, AI super cycle narrative going. Yes. And then on the East Coast, you have Wall Street who is getting paid effectively do the same thing. Mhmm. So you have, you know, these two centers of power that are both incentivized to keep the party going.
01:01:22 · John Coogan
[01:01:22] S0: Mhmm. Yeah. This this breakdown here. So the the Wall Street Journal is slicing up how the next three years will look based on projected global spending on data centers by financing source. So of 2,900,000,000,000.0, which is estimated over the next three years, I guess, four years. Tech companies will cover 1,400,000,000,000 of it. Private credit will cover 800,000,000,000 of it. Corporate bonds, 200,000,000,000 of it. Asset backed securitization, one fifty. Private equity, another $3.50. And to me, this looks like a very healthy way to actually finance this. This feels like it's not if it was like, if we were looking at this, if you broke down we've been through a $2,000,000,000,000, like, bubble before, and it collapsed very rapidly. What was that? It was, like, the meme coin era. And who and how did we break that down? It was not it was not the the cash flows of the most profitable companies in the world that were buying the long tail crypto assets. It was retail. And so the fact that this is, like, pretty removed from retail feels, like, safe to me. It's much safer than Sure. Than getting a a huge bubble inflated in, oh, everyone has to get in on the latest coin, and they're all nonsense. Like, there will be nonsense deals. We're already seeing nonsense, AI companies, and there certainly will be projects that get financed that Yeah. They just cannot build