It’s almost impossible for the AI backlog to be cleared by h1 2026. That’s what makes all of this so tricky. There’s a tonne of large DCs coming online in H2. Each one is huge, so will go some way to meeting demand. That’s probably why msft is going for these smaller deals

wonder when consumer AI will start being priced like phone contracts. Marginal cost of use isn’t 0. So just like in a contract where more data/ roaming costs more, there should be more flexible priced tiers for more usage. Outside of just free and $20 a month.

2026 capex has more upside imo.

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Aside from AMD, most openAI pumps seem to have retraced?

I got short aud/nzd wrong as q3 trimmed mean came in far hotter than expected It’s the most important measure by far and rightfully caused rates to reprice. However, consumption, job growth, job openings etc are all still weakening while NZ’s housing data looks promising

This is likely wrong after reading SK’s comments this morning. They will be used to help domestic firms expand into the US

Yes but who will host the models? Build apps of them etc? That’s exactly why most cloud providers are not model exclusive!

“There is no debate that thus far the ROI on spend has been positive and we’re not in a bubble” youtu.be/5ze3ZNvOdRY?...

Commercial AI is about agents and coding. That’s it. Coding has already taken off. I think it’s going to be a success. Next is about agents where there are glimpses still but not concrete evidence

JPM on China's tax system and how it encourages overcapacity

You should also see Amazon’s FCF in 2015-17 and again 2020-22. Both of which ended up paying off. So it’s not to say this will definitely do the same, though early indications suggest similar returns for AI cloud vs non-AI. It just that this just shows more investment not declining ROI!

☀️

WSJ tells us that when it comes to models, it’s not about size, it’s about what you do with it 😂 Large Language Models Get All the Hype, but Small Models Do the Real Work www.wsj.com/tech/ai/larg...

Increasing returns to scale

This is exactly the kind of stuff that AI *should* be good at. From mortgage originator Rocket (RKT).

Tokyo skyline

Meta doesn’t run a cloud business lol. In someways they are the exception

Spot analyses of early tech is not how the game be played

Tokyo is a crazy city. So good! Do not come here without preplanning and booking.

Off to Japan for a week for the first time. Lmk if any tips!

I thought SAP earnings were quite interesting yesterday as it pertains to broader European growth stocks. A lot has been priced.

Just from a narrative / regime perspective. We have seen - US terminal pricing falling back below 3% - Oil prices falling again (outside of last two days) - Asian exports staying robust Yet Asia dollar is trading like crap and looks like it wants to head lower.

My very ignorant take on this is that China is outcompeting Europe from a bottom up basis now. That makes the problem truly difficult to resolve. However the areas that can be supported are - lowering energy costs, - reducing regulatory burden , and - supporting domestic consumption.

For context: EU car industry still carries enormous economic and political weight It employs 13.6 million people, drives 32% of all private R&D spending - and four of the ten sectors with the fastest productivity growth lately were in automotive and transport.

Why is authors comparing the S&P’s dividend yield to 10y JGB? Who invests on this basis

Japan and South Korea are going to invest in OpenAI’s DCs Calling it now. www.wsj.com/opinion/dona...

Yes the whole space is extremely crowded with some stocks like memory more than doubling over the past few months. Says nothing about fundamentals etc

I think it's fair to describe this as wildly unsustainable.

I think it’s important to consider the latest round of circularity seperate to the earlier stages which were both necessary given the capital required to build infrastructure. Plus nvdia’s desire to diversify consumers

Receiving rates was an absolute layup in the U.K. Was just damn assymetric when all but one cut was priced out.

Bryce from ft getting rightly slaughtered imo

Is there *anything* he could have done so far to prevent it? The answer is no.

2026 is also understated - as Semianalysis also thinks

What I’ve learned during my short term looking at Brazil is that fiscal constraints trump environmental ones - even for lefty parties. This means more drilling permits over time than marketed because the revenues are so damn lucrative

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This is so small relative to what’s being bought atm. ETFs bought more than this just last week alone

Sorry but this is a dreadful article www.ft.com/content/f01c...

There’s lots of caveats with this number (most going to China and are sanctioned barrels) which makes the end conclusion nothing like 2020 though price implication is still negative.

Absolutely massive amounts of macro wonky content in gov Takata’s speech today.

How does Stuart Kirk keep putting out such low quality poor articles?

Very good article on a complex market that I’m still getting to grips with

The dumb rock is truly a unique asset

Annual gold returns since: 1970 +8.6% 1980 +3.8% 1990 +6.3% 2000 +10.1% 2010 +7.2% 2020 +15.6% Gold really is like no other asset out there (like it or not)

This is like a dumb spinoff of Billions

the bubble discourse has broken containment

Oh no

@moyeen.bsky.social nice UK rates note!

Some charts on what’s happening within the precious metals complex: 1) record inflows 2) western markets commanding a premium, not China 3) trades taking profit on gold, but staying long silver due to the arb