1/16 the ai industry is making an unusual bet: buy compute for years, sell intelligence by the token. banks, commodity merchants, airlines, utilities and cloud providers each explain a different part of the risk.

Why bankers make great sales reps “Bankers are programmed to work. The concept of a nine-to-five is completely foreign to these folks. They have intelligence, business acumen, and a lot of horsepower that is not always found when hiring for sales talent. Being able to call a CFO cold and say, ‘I just quit my job at Goldman TMT to join this credit card business,’ packed a very compelling punch for us.” @max11free Love to hear your thoughts @austinh___ @max11free @CharleyMa @morganjingram

Look at him, thats my Qual. Your what? My Qualitative! My vibe specialist. Look at him, you notice anything different about him? Look at his face. I'll give you a hint, his name is Jayden. He won a local poetry competition in bushwick! Yeah I'm sure of the vibe.

If you don't get your deal flow from overheard conversations in SFO, you aren't trying hard enough

Disclosing a large short position in $META. Thesis: Muse is offered free of charge with no meaningful cap on inference consumption. Meta is absorbing the full cost of compute, memory, and power on every query in pursuit of user growth. We believe this subsidy is unsustainable under adversarial usage. Position: We have deployed 10,000 endpoints running maximally compute-intensive workloads on a continuous basis. Deployment is scaling at 10,000 units per day. Unit economics: Our marginal cost per endpoint is approximately $300, incurred once. Meta's cost per endpoint is recurring and uncapped. We view this as a highly asymmetric trade. Channel checks: Retail sources confirm unusual laptop demand in the region. We are the source of that demand. Risks: Rate limiting, supply constraints at our primary vendor, and rising operating expenses on our side. Outlook: We expect material margin compression, a miss on next quarter's earnings, and elevated data center thermal risk. This is called activist investing.

It's official. As the bond market "meltdown" accelerates, the average interest rate on a 30Y mortgage in the US is up to 7.45%. That's up +150 basis points in 6 months and the highest since 2023, when inflation was at 6.4%+. What is happening? Let us explain. (a thread)

The presumption that the Fed raising short-term rates reduces inflation is predicated on the belief that higher rates reduce demand and investment. But what if higher rates don’t reduce demand and investment because the demand for intelligence and energy is unaffected by higher rates because winning the race for super intelligence has a near infinite ROI and the demand for compute will remain incalculable. Why won’t higher rates at this unique moment in history therefore lead to more inflation as interest costs are embedded in everything? And the problem is compounded as the more the Fed raises rates, the more inflation we will have and the more the Fed will need to raise rates further and so on. But what if the old models don’t apply to the current paradigm and the Fed is wrong? I think the Fed might have just made a mistake. Am I right or am I wrong?

If you’re a founder with a decently technical product, you should probably assume you’re talking to a meat proxy at least 50% of the time you’re pitching VCs

Erebor wants to be the first US bank in markets reopening to the global financial system. Venezuela first, now Syria. Basically: take geopolitical + compliance risk that big banks won’t, and become the financial bridge before others show up. theinformation.com/articles/…

Last Thursday, we welcomed Logan and Jake Paul to the Pentagon to meet with our warriors.

EA AI safetyism increasingly looks like Marxism-Leninism for the algorithmic age. The old vanguard claimed privileged knowledge of the inevitable course of History. The new one claims privileged knowledge of the probabilistic course of Humanity. Both use an elaborate intellectual framework to reach the same political conclusion: a small group of enlightened people must constrain everyone else for their own good. That has never lead to anything except monumental human suffering.

BREAKING: President Trump says he will issue a $5,000 "dividend" to every adult citizen in the US if the Republicans win the midterm elections. There are currently ~245 million US citizens age 18+, meaning this dividend would cost ~$1.2 trillion. This would mark the biggest economic stimulus payment since the pandemic.

"Housing is one of the largest ways things are going wrong for young people. And people blame that on capitalism, because that's the status quo. But, in fact, housing is one of the sectors of our economy that is least exposed to the free market." @emmma_camp_ joins @maggiemoda and @SamRaus1 for the pilot episode of Breaking Containment, Young Voices' new podcast about the stories that shape the timeline and front page. Full episode out this Friday at 3 PM ET.

think about what you hear in early stage funding (for equity capital). Venture won't even listen to you unless you say AI. That is now pushing downstream into the public equity markets (which people will claim is just equity investors losing their heads per usual) but also into the debt markets, as chips and datacenters use debt financing to build out the infrastructure. Given the degree to which the market is compute starved the datacenter builders will still happily build at higher cost of financing (since their projects pencil so well), and the durability of the nvidia chip values means that so long as they're building nvidia they can collataralize debt against the chips, lowering cost of finance for even more balance-sheet tenuous operators. I would expect that you will see this cut against high yield at first. After all the debt finance has to come from somewhere, but high yield financing generally sloshes around to where the marginal opportunity lies (and high yield investors are expecting some of their credits spin sideways on roll risk and general business idiosyncrasies.) That compute will be presented and financed as a more stable more investment-grade-y asset class and so begin competing for funding against corporations and entities that aren't used to such a fierce level of competition is the surprising bit that I expect people aren't really dimensioning or anticipating. As the annual capital requirements for datacenter build outs scales into the trillions, that becomes meaningful relative to the size of total global corporate issuance. If AI infrastructure builders can tolerate a higher cost of funding because their projects underwrite better, where does that leave the incumbent stable businesses expecting to roll their credit at a more normal spread. Of course the base rate matters as well, if real GDP growth inflects as we anticipate (and you can already see the leading indicators that this is going to occur) that should naturally drive long rates higher (even as technological deflation keeps inflation in check.) Cross the two and very stable businesses that seemed to be chugging along fine could suddenly find themselves starved for inexpensive capital to a degree sufficient to destabilize their operating models. Be very wary of businesses that claim they can live outside of disruption; we are at a pivot point, and the world is turning.

This oil deal with Venezuela is absolutely insane. President Trump just announced that the US has reached a deal to secure "majority control" of over 65 billion barrels of Venezuelan oil reserves. Furthermore, the US currently has ~46 billion barrels of proven crude oil reserves. Combined with the 65 billion barrels covered by this agreement, the US would have domestic reserves plus control over ~111 billion barrels of oil. To put this into perspective, the entire world has roughly 1.57 TRILLION barrels of proven crude oil reserves. In other words, the US is set to control ~7.1% of all proven oil reserves in the world under this new agreement with Venezuela. At ~111 billion barrels, the US would be almost exactly in-line with the United Arab Emirates, which has 113 billion barrels of proven crude reserves, and it would exceed Kuwait's 102 billion barrels. Assuming the agreement is structured as outlined in President Trump’s announcement, the implications for global energy markets will be enormous. We will publish more in-depth analysis soon.

Historic intervention is coming. Despite several announcements by the US Treasury about imminent intervention, yields still won't fall. This includings doubling buybacks to $4+ billion per operation and the Treasury considering using its $950 billion General Account for these purchases. Reports now state that US Treasury Bessent "will do whatever it takes" to lower yields. In addition to buybacks, this could include selling short-term debt, possible elimination of long-dated bonds, and more. Meanwhile, on Friday night, President Trump even said that he could use the US Military to lower yields, though it is unclear exactly how he would do so. The reality is that the Fed cannot cut rates in this environment and the Trump Administration knows this. So, direct bond market intervention is the only solution to drive interest rates and yields lower over the short-run. Our view? Don't fight the Treasury.

alexandra ocasio cortez embodies the american zeitgeist more vividly than almost any politician. she effectively represents america’s educated, urban, millennial condition which is enormous agency (romantic uncertainty + delaying family, etc) paired with profound uncertainty about what life is actually for.