00:05:21 · Jordi Hays, John Coogan, Derek Blasberg, Apoorva Mehta
[00:05:21] S0: That were basically taking the stance of the polls are wrong and the prediction markets are wrong. Like, just every indicator that we have Yeah. Is And then it turns out they were actually... Those individuals were wrong like way way... They were way more wrong than I think anybody even thought they were maybe wrong. Right? [00:05:43] S1: So, wrongs don't make right in this scenario. Yeah. So sheet Fascinating. Kalshi came in at 95% accuracy when the polls opened. So you can always look at a prediction market and it's like, oh, right before the mainstream media calls the election. The prediction markets usually have it pretty dialed right before then. But the question is like, what's the predictive power a month, two months before? But even three months before Kalshi was at 81 accuracy whereas Vote Hub average was 77%. [00:06:15] S4: Which which that's... [00:06:16] S1: 75%. Know, like they... [00:06:17] S0: Just just my napkin math that feels pretty impressive given that a lot of those markets at the time were not like eighty twenty. Right? Oh, yeah. They were more like sixty forty. [00:06:27] S3: Yeah. Yeah. [00:06:28] S0: Yeah. And so it would appear that there... You you can maybe put a little bit more weight on average Yeah. On markets Yeah. Where there's like a definitive leader.
00:06:28 · Jordi Hays, John Coogan
[00:06:28] S0: Yeah. And so it would appear that there... You you can maybe put a little bit more weight on average Yeah. On markets Yeah. Where there's like a definitive leader. [00:06:37] S1: Yeah. So from my perspective, the, people felt this way with... I think it was the Emmys or the Oscars where the prediction markets were on the were on the screen. And so, you know, the announcer comes out and says, oh, the the best picture nominees are. And then you can just see like 99% chance that this person's gonna win. And I think Polymarket called every single one correctly. So it sort of like ruined the Oh, yeah. Thrill of watching it because you're just like, oh, okay. The... Again, the one that they put on screen won. Yeah. And that's sort of how I felt where I felt like the prediction markets were calling this blue wave for months. [00:07:12] S0: Yeah. And... It worked. You can put odds on the screen during a football game because the result is not decided when somebody just walks out on the field and the result. Right? Whereas in some of these award shows, it literally is just like totally decided. Somebody comes out, reads the result. It's over. Yeah. And so...
00:07:12 · Jordi Hays, John Coogan
[00:07:12] S0: Yeah. And... It worked. You can put odds on the screen during a football game because the result is not decided when somebody just walks out on the field and the result. Right? Whereas in some of these award shows, it literally is just like totally decided. Somebody comes out, reads the result. It's over. Yeah. And so... [00:07:30] S1: And so, going into yesterday, I I was very much like I like I'm not following it today. I I I just I'm... I've I've processed all of the... All of this and all the downstream effects. And I think the market had as well. I think I think a lot of the selling off in the AI stocks in some of the data center builders, I think that was because everyone was clocking that this was gonna be the outcome. And so you don't think so? [00:07:57] S0: I don't... I I... The thing the thing is, I don't recall seeing a single person making the claim that the Texas governor was gonna be a Democrat. [00:08:08] S1: That's true. Yeah. [00:08:09] S0: At any point.... [00:08:11] S1: Guess that is sort of a like like a surprise. [00:08:13] S0: Right when the prediction markets flipped last night. [00:08:14] S1: But I I I would say that although the the Texas Texas race is important, the 40 odd data center bills are probably more important in aggregate. For sure. And so those have been in process that it would... That permitting would become more... [00:08:31] S0: And the other thing is it's not like Greg it's not like Greg Abbott was like Yeah. Doing rallies being like, we're gonna build them all here. [00:08:37] S1: Yeah. No doubt.
00:08:37 · John Coogan, Jordi Hays
[00:08:37] S1: Yeah. No doubt. [00:08:38] S0: He was also he was Yeah. Also [00:08:40] S1: enacted a moratorium of one month. So, yeah. It it was it was going back and forth. The other interesting story is, yeah, I mean, compute campuses, big loser, except for in North Dakota. North Dakota voted in favor. But Ben Thompson has 10 takeaways that we can kind of run through. He says, the AI trade got it right. The most obvious reason why the stock market has been rocky over the last few weeks is the tightening of credit markets. We are needless to say full on into the equity funding era. At the same time, it seems that this outcome is very bad for the AI trade in the short term, but much of the pain may have already been endured because we've seen that selling off even though spot markets like the value of GPU hour is increasing, The models are getting better. But maybe there's been a process over the last few months, mostly speculative, that, you know, that people have been digesting the fact that there might be a pullback in new compute coming online. And so more data centers, more GPUs warehouses as opposed to... [00:09:45] S0: The craziest thing to me is how little attention it's getting that prop 40 didn't pass. Like prop 40, as it was written, was going to destroy the model for building technology companies in California. Like, I... A bunch of people on our show... That have come on our show are like paper billionaires. [00:10:05] S1: Sure. Right? Oh,
00:10:05 · John Coogan, Jordi Hays, Derek Blasberg
[00:10:05] S1: Sure. Right? Oh, [00:10:06] S0: yes. Yes. If if that would have passed, of course, it would have been litigated. Yeah. Yeah. Yeah. It it wasn't like, you know, on November 4, go to your bank and Yeah. Get a get a cashier's check for, you know, $50,000,000 and go bring it in. But it's like California Californians like resoundingly voted against Yeah. Yeah. Know. Cool. I I think that there were, again, a lot of flaws with the way it was written. [00:10:32] S4: There was [00:10:32] S0: a lot of incentive for different groups that would normally be in favor of attacks like that to actually be against it because they weren't gonna benefit from it directly. But yeah, pretty good [00:10:46] S1: biggest outcome there. Loser in the California election are the jealous senties who are trying to nerf their bean air opponents. Right? [00:10:55] S0: Potentially. [00:10:56] S1: So somebody sitting on $400,000,000, they're getting money mogged Yeah. When they pull [00:11:01] S0: up to the terminal. [00:11:03] S4: The four [00:11:03] S0: d chest there was [00:11:04] S1: And [00:11:04] S0: they they say were [00:11:05] S1: Yeah. [00:11:05] S0: I wanna were spending heavily on
00:11:07 · John Coogan
[00:11:07] S1: I wanna back up the truck to try and nerf my my rivals potentially. But bad news for them because it didn't pass. Ben Thompson's second take. Neo Clouds are on the edge. They've been at the forefront of the credit concerns from a credit... From a certain perspective being unable to build data centers has a silver lining in that they couldn't... If... In that they couldn't get the money to pay for them anyways. Moreover, Neo clouds facilities that are already permitted now have an asset that is going to be scarcer than expected, which is a very, very interesting... And I think every every data center project will need to be reevaluated, like what is the status of Stargate and and what's happening in in Abilene and Texas? Is all of that permitted and the moratorium will just be on new capacity because the Stargate pitch was enormous, an enormous campus. And I believe a lot of that was already approved and and and good to go. So new moratoriums wouldn't reach back to that. So that still would come online. So that could be very bullish for anyone who's involved in that. At the same time, there's there's a hard scenario if you're a if you're a Neo Cloud that has that has built a bunch of data centers, but then you sold all your compute on long contracts, so you're not taking advantage of the spot market being in contango and and being able to sell at higher rates each month after month to, you know, labs that need compute more than ever. So you're you're you've sort of reaped all the reward on your first build. You need to go build a new building, a new data center and now you can't. And so you can't bring new capacity online that you can sell into the spot market and make more money on. Yeah. So that's a little bit tricky. There is yeah, there is a... Just a tough dynamic for some of the neocludes where a lot of them have incredibly talented people that can go and build things, but they just might not have enough money to finance them and now they might not have enough political power to get them across the finish line. Although, there are clearly some states, some areas in the country that are receptive. And they... It's not that they... Like, North Dakota is getting called out as a as a as a state that denied a data center ban. Right? But what we're not talking about is the states that didn't even have them on the menu. Right?