00:14:58 · John Coogan, Gavin Baker, Jordi Hays
[00:14:58] S0: Mhmm. [00:14:59] S2: And then I do think as far as how much capacity is going to come online, one thing that I think is actually healthy about what's happened in these financing markets is I hope it concentrates capacity and supply in the competent operators where they can finance it through prepayments. You know, you can kind of finance these GP purchases two ways. By the way, CoreWeave is great. CoreWeave runs GPUs well. They bring a lot... They they are very very good. They just sadly locked in a vast amount of compute and long term contracts that are now way way under market. You know? And I should [00:15:39] S0: be doing So they sold their they sold their GPUs for fixed prices, and that's why they're getting hammered right now. It's not that they don't have compute. They're not bringing it on. They have the semi analysis diamond tier. Everyone knows that clusters Yeah. Work. They're good. They are reliable, but they just sold for too cheap, and they should have hold... Held on or had variable pricing. [00:16:00] S1: Is is you think Elon studied that and said, like, we're not gonna make that same mistake, and that's why they're adopting this more short term contract... [00:16:08] S2: I don't... Elon is a first principles thinker. I don't think he was probably studying CoreWeave or Nebius or anyone Yeah. He was probably reasoning from first principles. But the conclusion he came to is prices are going up. We... If we are willing to sell into the spot market, we can have paybacks well under a year Yeah. Get big prepayments [00:16:31] S0: Yep.
00:16:32 · Gavin Baker
[00:16:32] S2: And that's, I think, that's a better probably financing model for the market we're in. And what I also like about it... And by the way, CoreWeave, I think, is very aware of this. They're trying to get more spot exposure. They're trying to, you know, do less of these big long term off take agreements. Mhmm. But standing up a big GPU cloud... I I should say, bringing on the power, standing up the cluster, it's like running a Formula One team. Yeah. And a bunch of people who have no real relevant experience, you know, whenever they acquire some land and some power, and then, you know, they get a zero down payment off take agreement from someone. And a lot of that is being cleaned up and I think, you know, supply is being what... This is a forcing function to allocate GPUs to people who can actually bring on a cluster, energize the GPUs, run it well. Like, you know, running a Formula One team, it's like really hard. You gotta like pack everything up, put it on a plane, go to a new city, unpack it, set it up, set the car up. You need all the people, you know, to, like, you you know, whatever. Change the tires, to change the rear wing if you get in a collision, to, you know, do whatever needs to be done during the race, to do the strategy, to communicate with the driver. It's really, really hard if... And it's not like, you know, some of these people, they don't have the relevant experience. You know, Corwee, Crusoe, Nevis, SpaceX, the big hyperscalers, you know, these are companies that could bring on GPUs and energize them and and run them. But... And I do think something that was announced at GTC Berlin is actually pretty important for this, and that's that DSX pod, which is gonna make it a lot easier, you know?
00:18:30 · John Coogan, Gavin Baker
[00:18:30] S0: Oh, sure. [00:18:31] S2: Seven racks. It comes preassembled. Yeah. You know, you just kind of literally plug it in and it works. Yeah. And right now, when you get the GPUs, you know, maybe if you're if you're SpaceX and you're really really exceptional at execution in the physical world, you can get them energized quickly. But a lot of people, it takes them six months, you know, three months, six months to get them energized, really get them working. And if we can, through, you know, this new product from Jensen, get that time down, I think that's that's also healthy because that effectively takes a lot of working capital out of the market. You know, you have as these numbers are getting bigger, if it takes six months to energize them, you know, that could be hundreds of billions of dollars of assets that are not generating revenue. So I think that's another... That's a product innovation that's gonna help with this. But I think this is, you know, we we will see who who energizes GPUs in in in in '27. I'm I'm confident that the, you know, the companies I named, I think they're gonna, I mean, the future is always uncertain, but these are companies with a proven track record of execution. Yeah. And we'll see about others.
00:19:42 · John Coogan, Gavin Baker
[00:19:42] S0: So I have a follow-up on that. One is just one click higher from the Neo Clouds or the Neo Labs, and there's been this speculation that Neo Clouds might NeoLabs might sort of pivot into NeoClouds. Is that dynamic gonna look like they signed a multiyear offtake agreement with a NeoCloud, and then they want us to just sell into the spot market? That's what's gonna happen? [00:20:02] S2: Yes. I mean, what Sarah Fryer said Yeah. And Sarah Fryer is an exceptional CFO. Yeah. Said, you know, everybody made fun of us for signing all these compute commitments and we could sell them all at a three, four, five x premium. [00:20:15] S0: Today. [00:20:15] S2: Yeah. And she was being literal. [00:20:17] S0: Yep. Yep. [00:20:18] S2: And so if you if you signed a long term compute contract [00:20:23] S0: Yep. [00:20:23] S2: Really at any point prior to May 2026 Mhmm. You were way in the money. Yep. You're buying compute for, you know, maybe Yeah. 10 or fifth... 10 or $15 a watt. Yeah. [00:20:37] S0: And you [00:20:38] S2: could sell it at a massive premium to that today. [00:20:42] S0: Yep.
00:20:42 · John Coogan, Gavin Baker, Jordi Hays
[00:20:42] S0: Yep. [00:20:42] S2: And then the point the point, you know, that Carmen made about, you know, the the forward curve being in contango is actually really important and just like... It's not just that the spot market is tight today. You have to pay vast amount even with all this capacity coming online. You have to pay a truly vast amount to bring on a cluster in mid to late twenty seven. And I think that's something that just maybe public markets are not appreciating even though, you know, it's not all of this is public. You know, Sarah Fryer said that. Yeah. You know, Yeah. Yeah. All these inference clouds have kind of given press releases. You hear a bunch of people on x talk about how hard it is to find compute into '27. [00:21:23] S0: Yep. [00:21:24] S2: Carmen Lee stands up and says, you know, like the market in '27 is is crazy strong. [00:21:30] S0: Yeah. [00:21:30] S2: So it's all out there but I think for whatever reason it's not legible to the public Sure. [00:21:37] S1: Jordan? What... Talk about your outlook on biology as a as a... As an area that that the labs are investing in. It feels very exciting and that there's, you know, tremendous potential, but I think that overall concern is around timelines. It's like there's very real costs, like, coming online, infrastructure costs, and opportunities in biology seem like they're very real, but, may take, you know, years to get these, you know, will almost certainly take years to get drugs in market and actually drive, you know, revenue that would then finance.
00:21:37 · Jordi Hays, Gavin Baker, John Coogan
[00:21:37] S1: Jordan? What... Talk about your outlook on biology as a as a... As an area that that the labs are investing in. It feels very exciting and that there's, you know, tremendous potential, but I think that overall concern is around timelines. It's like there's very real costs, like, coming online, infrastructure costs, and opportunities in biology seem like they're very real, but, may take, you know, years to get these, you know, will almost certainly take years to get drugs in market and actually drive, you know, revenue that would then finance. [00:22:14] S2: Yeah. I mean, we'll we'll see how long it takes. You know, Montana has an interesting new program for for new drugs, I think is helpful. But I think a really big unlock. We we have a lot of compounds and people have used AI to figure out that you can use maybe a drug that we've had for fifty or sixty years for a very rare disease that's devastating for like ten thousand kids a year and effectively cure that disease. And a friend of mine did this and it's, you know, it's it's it's his story to tell, so I'm not gonna tell it. But AI has already saved a lot of lives. And I do think, you know, the AI industry, it's, you know, they're like negative five out of 100 from like a PR. A 100%. [00:23:05] S1: But they... We gotta be more like pharma, [00:23:07] S0: the popular kids. Yeah. Exactly. [00:23:10] S2: Well, no. They need to start telling these stories. [00:23:12] S0: Yeah. Yeah. [00:23:12] S2: Yeah. 100%. And by the way, are... You guys are coming to tomorrow at. [00:23:16] S0: We are.