Chamath

But I think what the incoming governors are going to say is, these things are off the table, and instead we want to have directly measurable economic impacts before we even entertain this. I think what it means is we're going to see a slowdown.

Why? Because if you constrain the amount of assets that can actually generate compute, and a smaller surface area of it is available to the leading companies, those leading companies will have to pay more, the user experience will decay, and then other products can have time to catch up.

And now that is important because Anthropic and OpenAI are in a very fast recursive loop. They're on a 60 to 90 day loop in improving their models. So now all of a sudden, without an infinite amount of supply coming online, you can slow these folks down.

So Google has a ton of capacity coming online. They could say, I'm going to give it to Gemini. What does that do? It actually allows Gemini to catch up in quality relative to the foundational models.

The market rate, and it's probably not just double, it could probably triple. So whatever revenue you see on SpaceX's balance sheet from Anth could 2 to 3X, and Anth would have no choice except to immediately capitulate and take the higher price.

If anything, I think what's going to happen is, all the renter classes will get co-opted. For example, I don't know if you guys saw today, but Google just took over a Crusoe data center. They co-opted the renter. They're like, you're gone, we're going to take it over.

To the extent that that happens, maybe you'll get some regulatory capture on the one end, but you're going to constrain the supply so severely on the other, that the real people that will be in control of it are Meta, Amazon, Google, Microsoft, and SpaceX.

You have to remember, the foundational model companies are not home-free. What does home-free mean? That they have a fortress balance sheet, a profitable business model, and quasi-infinite compute for their own ambitions. Right now, they are renters, and the renter class in data centers as of Tuesday is very much at risk.

The dollar cost per megawatt per month is going to go through the roof. The dollar cost of a GPU hour is going to go through the roof. And the people that will be willing to pay the premium are going to be the ginormous companies with huge balance sheets.

Basically, the takeaway from all of this is, I think, Anth is emblematic of the entire AI complex, which is to say, it's all about datacenters, which means it's all about power.

And so the demands they're going to put on the capital markets into the IPO are going to be less, which means that they'll have more pricing power. They'll be able to manage the float better. All of these dynamics, I think, give you a constructive read going into the IPO.

You're absolutely right, Jason. The problem is the regulatory pushback. The amount of approvals and the ability for utilities to find the staff and the ability to actually turn these things on and then the ability to get the capital equipment you need, it just isn't there right now.

So when you look at this, what does it mean for treasuries having to compete with Facebook and SpaceX and Anthropic and OpenAI for money? Well, it means that somebody is going to have to pay more.

If that's true, then Friedberg's chart is also true, which is that those rates cascade through the ecosystem. The neoclouds will have to pay more. All these other folks have to pay more. What that means is that you increase and you pull forward the risk of defaults, which we talked about last time.

The problem is we're trying to buy an AI stock. So many roads lead to downside risk, more than upside risk.