Show Notes
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How do Bitcoin miners end up running the infrastructure behind AI? This week we break down neoclouds like CoreWeave, Nebius, and Lambda. What makes a neocloud different from AWS, Google Cloud, Azure, and the hyperscalers? Why were crypto miners, sitting on warehouses, power contracts, and a business model with a built-in expiration date, so well placed to pivot? And if these companies don’t have the cash flows of a Google or a Microsoft, how are they paying for billions of dollars of chips? We dig into chip-backed financing. How can a junk-rated company borrow against Microsoft’s AAA credit? Why are lenders comfortable with 95% advance rates? What happens when the compute contracts are only three to five years long and customers like OpenAI aren’t profitable yet?
Then we get to the NVIDIA of it all. NVIDIA invests in the neoclouds, backstops their unused capacity, and sells them the chips. Is that savvy, or is it circular financing? How does it compare with Lucent in the dot-com bust? What about the take-or-pay obligations that never show up on anyone’s balance sheet? Plus: OpenAI’s revenue miss, how media bias shaped the coverage, and whether Starbucks and Chipotle should merge (pumpkin spice burrito, anyone?).
0:00 Market-Moving Headlines: OpenAI’s Revenue Miss 3:27 Starbucks & Chipotle M&A 6:29 What Are Neoclouds? 9:12 From Crypto Miners to Neoclouds 13:40 Hyperscalers vs. Neoclouds 17:21 Chip-Backed Financing 23:30 The NVIDIA of It All 29:56 Circular Financing Risks
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Go to groundnews.com/skinny for a better way to stay informed. Subscribe through our link for 40% off unlimited access to world-wide coverage.
Go to www.groundnews.com/skinny for a better way to stay informed. Subscribe through our link for 40% off unlimited access to world-wide coverage.
Everyone in the financial media is telling you the same story: Scott Bessent's surprise Treasury buyback announcement is a thumb on the scale of the bond market, and it's making Kevin Warsh's job at the Fed harder. But what if the headlines have it exactly backwards? What if the Treasury Secretary is actually running interference for the one thing the Fed Chair can't do himself? Fresh off asking Bessent this question face-to-face at the Charlotte Economic Club, Jen breaks down why she thinks there's a stealth rate hike hiding inside what looks like yield suppression, and why the best way to understand it is a three-act magic trick straight out of The Prestige.
The LA Lakers --- a prestigious basketball franchise that didn't change hands for 46 years --- just sold twice in ten months, the second time for $2.5 billion more than the first. The seller is Mark Walter, CEO of Guggenheim, owner of the Dodgers and part of Chelsea FC, and the man whose laptop and phone the FBI seized off his private jet just as the Lakers deal was coming together. Since then, one of the insurance companies in his orbit has revised its reported related-party investments from $1.4 billion to $17 billion. Quite the rounding error.