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?
00:13:18 · John Coogan, Jordi Hays
And there are a number of states that have been receptive and continue to be receptive to the point where they haven't even had legislation Yeah. To ban data centers. [00:13:28] S0: To me, it's great it's great data for technology industry to, like, comb through Mhmm. And look at where where people are more favorable to data centers Yeah. And go build them there. Yeah. At least try to. Yeah. Right? There's gonna be some areas where they're pro data center [00:13:43] S1: Yeah. [00:13:43] S0: That have problems getting access to energy Yeah. Right? And and and other issues that they run into, but Yeah. They don't all have to go to space Yeah. Just yet. [00:13:53] S1: Yeah. Yeah. The the the the energy, I think, is is less of a factor. I think natural gas is pretty abundant, but you still have to build pipelines around it. And then the big thing is just like the overall infrastructure. Infrastructure. Like do you have big roads? Do you have the ability to move big materials around while you're in that construction phase? There are certain parts of America where even just building a house is hard because you're on dirt roads and and Yep. And that's tricky. So anyway, you can see some of the Neo Cloud reshuffling happening in the market today. Ben Thompson says hyperscalers are winners. The downside for the Neo Cloud's upside [00:14:29] S0: They need that.
00:14:29 · Jordi Hays, John Coogan
[00:14:29] S0: They need that. [00:14:30] S1: Thank you. Yeah. Jeff Bezos is doing well. Amazon's way up today. They're more likely to grow their share of AI compute than they were before. Moreover, investors may be pleased if the hyperscalers ambitions are somewhat curtailed. So investors are like, oh, okay. Maybe you'll be able to bring the dividend back or return some cash. You're not gonna you're not gonna need to tap the deck markets because you won't have anywhere to invest it. This could be something that investors are excited about. Political opposition is an excuse to moderate spending. This is the four d chess I was joking about with Joe Wiesenthal, which all of a sudden is being taken very seriously. I was kind of riffing with him and and now I've seen a number of people put that in writing as like their official take that this is good. And we'll see it. We'll see how it plays out. [00:15:13] S0: For NVIDIA Yeah. I think [00:15:15] S1: Yeah. [00:15:15] S0: Nothing is ever as good or bad as it seems. Yeah. Sort of an iron law. [00:15:19] S1: Nothing ever happens. [00:15:20] S0: Things happen. No. Nothing ever happens. You did. No. [00:15:24] S1: That's a good point. Yeah. [00:15:25] S0: One thing, you know, is we got a report from from a friend who was walking up and down Sand Hill Road this morning. [00:15:35] S1: Oh, yeah? [00:15:35] S0: And they sent a clip. They heard this song playing. This was playing outside of the... Was playing so loud.... [00:15:44] S1: Windows. Yeah. Sort of sorrowful moment Yeah. On Sand Hill.
00:15:44 · John Coogan, Jordi Hays
[00:15:44] S1: Windows. Yeah. Sort of sorrowful moment Yeah. On Sand Hill. [00:15:50] S0: They have to delete some tweets. [00:15:52] S1: Delete some tweets. Potentially. This is, of course, the song from the w... Is it actually in the WWE documentary or is it just overlay... [00:16:02] S0: I think it's just become a meme. Okay. Well... Wonderful wonderful song called Maintaining Love. [00:16:08] S1: Yeah. That's gonna go in the heavy rotation. I've been listening to more and more meme core on Spotify. I got Queen Street Full. Heavy rotation. [00:16:16] S0: Full brain rock. [00:16:16] S1: Brain rock. It's great. Let me tell you about Cisco. Data infrastructure for the AI era, unlock seamless real time experiences and new value with Cisco. Ben says NVIDIA mixed bag almost certainly a short term loser. Fewer data centers mean fewer NVIDIA chips. But the long term bull case for NVIDIA is that if there's a set amount of data centers that exist and then you can't build them anymore, you have to get the most tokens per watt you need to be... The most efficient chip. Yeah. He has a he has a phrase for that. I forget what it's called. It's it's something good here making this point. ISO power means that power is the constraint. And so you already have power going to a building but you're running some older technology, some older chips. There's now more of an incentive to upgrade those to the latest and greatest to get the most out of a particular power envelope. So...