00:00 Speaker A
You know, you learn in business school, Josh, very early on, right? One of the first things they teach you is the factory example. When a company builds a factory, right? You spend 10, 10 million dollars on a factory and it’s going to generate 5 million for the next three years.
00:12 Speaker A
It’s a good investment. They’re literally doing this kind of math right now and saying, hey, if we can generate 25 billion per gigawatt of output, and we do 10 gigawatts,
00:21 Speaker A
that’s 250 billion. Mhm.
00:23 Speaker A
Then you do it over years, you start adding up the maths and all of a sudden you’re like, well, we put 100 billion in and we’re going to generate 250 billion out. It starts to make a lot of sense.
00:29 Speaker A
Every single hyperscaler right now is is is is beating estimates in a way that, you know, the free cash flow mafia does not like. But I think I’ve said this to you before, but the bottom line here is the existential risk of underspending is substantially higher than the existential risk of
00:44 Speaker A
of of overspending. So, all of these companies get it. And like I said, in some cases, you know, people will look at Zuck and be like, oh, he did reality labs. He wastes tons of money. AI is not the Metaverse.
00:53 Speaker A
This is for the the incumbents. Mhm. The Mag 7, maybe we’re not going to call them that anymore. I heard you talking about that. For these kinds of companies, spending big right now is how they ensure long-term viability, knowing what’s coming and coming behind them are the quote-unquote the mango, right? You got the the Anthropics and the SpaceX. I I had to stick with this one.
1:08 Speaker A
And and the open AI’s, right? And these companies are coming into the market and they’re right now they’re loss making. They have to continuously raise funds. They are in a position where, look, Google and meta, they’re using these technologies, but they’re also building these technologies. They need to set themselves up for long-term success and access to the highest amount of compute is going to be the gating factor between remaining market leaders and becoming those companies that we talk about in business school and those companies that we talk about as, oh, remember when they used to be the Mag 7?
