This week on Equity, Anthony Ha and Max Zeff go beyond the headlines to break down what's really going on in these AI infrastructure deals. https://t.co/Q177pz4g3s ...

Core Insights - Nvidia Corporation is experiencing significant growth driven by AI demand, with a notable increase in compute requirements highlighted by a 100x rise in inference generation tokens from Google over the past year [2] - The company is projected to achieve $250 billion in data center revenue next year, with potential growth pushing this figure closer to $300 billion if it maintains a 50% growth rate [2] - Nvidia's recent partnerships, including a $5 billion investment in Intel, are expected to expand its total addressable market (TAM) by $50 billion in the data center and PC sectors [3] Company Performance - Nvidia's annual revenue growth is reported at 56%, a decline from nearly 100% YoY growth in previous quarters, indicating a slowdown amid increasing competition and capital expenditure constraints [2] - The company is likely to continue growing due to its strong position in the data center market, although the growth rate may not match past performance [3] - Competition from major players like Broadcom is anticipated to impact Nvidia's margins in the long term [3] Strategic Moves - Nvidia's recent AI infrastructure deal with Intel is seen as a strategic move to capture market share from AMD in the data center and PC markets [4] - The collaboration with OpenAI and Intel, along with Oracle's partnership with OpenAI, reflects ongoing substantial investments in compute resources driven by AI demand [2][3]

Core Insights - TeraWulf plans to raise approximately $3 billion through a debt offering to finance its transition from crypto mining to AI infrastructure [1][8] - Google is expected to backstop the deal, which is being coordinated by Morgan Stanley, but uncertainty around the terms has led to stock price volatility [2][4] - TeraWulf's stock has experienced significant volatility, with a Beta coefficient ranging from 3.36 to 4.267, reflecting market nervousness about its strategy [6][8] Financial Strategy - The company aims to raise $3 billion through high-yield bonds or leveraged loans, with the deal potentially closing as early as October [4][8] - Google's involvement includes a $3.2 billion backstop on data center lease obligations, providing some stability to TeraWulf's financial position [3][8] - Credit rating firms are reportedly considering grading the TeraWulf transaction between BB and CCC, indicating a high-risk profile [5] Business Model Transition - TeraWulf is shifting to a dual business model that combines Bitcoin mining with AI infrastructure hosting, reflecting a significant change in its operational focus [7][8] - The transition involves high capital expenditures and poses risks such as delays, cost overruns, and technical difficulties in a competitive market [7][8] - Effective resource management between the cash-generative Bitcoin mining and the capital-intensive AI hosting is crucial for the company's success [9]

分组1: Nvidia and Intel Deal - Nvidia has signed a deal to take a $5 billion equity stake in Intel, co-developing custom products for data centers and personal computers [1][2] - Nvidia holds a 90% market share in GPUs but is not the leader in CPUs, which are dominated by Intel and AMD [2] - The deal aims to enhance communication between Nvidia's GPUs and Intel's CPUs through NVLink Fusion, allowing for faster data transfer [2] 分组2: Market Implications - The partnership is seen as a strategic move by Nvidia and Intel to counter AMD's market share in CPUs and GPUs [5] - Nvidia's investment represents a small fraction (0.1%) of its market cap, indicating that while significant, it may not drastically alter Nvidia's overall strategy [4] - There are potential regulatory challenges regarding the partnership, as it could be viewed as anti-competitive [4] 分组3: Quarterly Earnings Discussion - The discussion around quarterly earnings reports highlights their importance for early-stage companies to provide regular performance snapshots [7][8] - Some experts argue for a shift to semi-annual reporting to reduce compliance costs, although this may not significantly change short-term business focus [7][8] - Concerns exist that less frequent reporting could allow issues to fester longer, potentially harming investors [9] 分组4: Stocks on the Radar - The Trade Desk is being monitored due to its recent struggles despite a strong historical performance, with management addressing user concerns about its new AI platform [12] - General Motors is highlighted for its strong position in the EV market and aggressive stock buybacks, trading at a low PE ratio [14] - Celestica is noted for its role in the AI infrastructure boom, benefiting from increased demand for assembly and manufacturing services [15][16]

Core Business Performance - CoreWeave, Inc (CRWV) reported a significant revenue increase of 207% year over year, reaching $1.2 billion, marking its first billion-dollar quarter [1][11] - Adjusted EBITDA rose to $753.2 million from $249.8 million in the prior-year quarter, resulting in an EBITDA margin of 62%, slightly below last year's 63% [1][11] Market Position and Demand - The company operates in a structurally undersupplied AI-cloud market, with growth constrained by capacity rather than demand, as evidenced by a backlog of $30.1 billion, which has doubled year to date [2] - Key contracts with OpenAI and other hyperscalers, along with expansion into finance, healthcare, and AI start-ups, are driving this backlog increase [2] Expansion Strategy - CoreWeave aims to increase its active power from 470 megawatts to over 900 megawatts by year-end, supported by major projects including a $6 billion data center investment in Lancaster, PA [3] - The company is also pursuing a joint venture for another data center in Kenilworth, NJ [3] Financial Expenditures - Total operating expenses surged to $1.2 billion from $317.7 million in the previous year, with capital expenditures (capex) rising to $2.9 billion, an increase of $1 billion from the last quarter [4][11] - Interest expenses reached $267 million in the second quarter, reflecting heavy debt usage for growth, contributing to a net loss of $291 million [4][11] Future Financial Outlook - For the third quarter, CoreWeave anticipates interest expenses between $350 million and $390 million due to high leverage, which may pressure adjusted net income and free cash flow generation [5] - Investors are expected to closely monitor the company's ability to manage rising costs while maintaining margins amid aggressive expansion [6] Competitive Landscape - Nebius N.V. Group (NBIS) reported a 625% year-over-year revenue increase to $105.1 million, achieving positive EBITDA in its core AI infrastructure business [7] - Amazon Web Services (AWS) remains a dominant player, with $30.8 billion in sales, up 17.5% year over year, and is actively expanding into AI infrastructure [9][10]

Intel (INTC) shares have increased by 6.4% in just one day. The stock also remains up by about 25% since mid-September. The gains are driven in part by Nvidia’s move to invest $5 billion into Intel. Besides this, the two companies announced a collaboration to jointly develop multiple generations of custom data center and PC products for hyperscale, enterprise, and consumer markets. The deal likely gave investors some renewed confidence in Intel’s technological relevance, especially in AI infrastructure spac ...

Claire, the AI trade has been the absolute juggernaut in markets over the past couple of years now at least. Are there signs in your mind that things are legitimately cooling off or is this just a pause that refreshes so to speak. >> Morning, Dom.It's great to be on your show. Um, there's there's not a pause, there's an acceleration in in our view. I mean, given the fact that was announced between Nvidia and Open AI, the importance of which we don't think can be overstated.Uh I mean this was for 10 gigawatt ...

All right, OpenAI's spending spree continues. In just 48 hours, it's announced a buildout equivalent to 17 nuclear reactors totaling $850 billion in spending for today's tech check. Mackenzie Sagalo sat down with OpenAI CEO Sam Alman and asked about those overspending concerns.Mac >> Mike OpenAI CEO Sam Alman was clear you cannot afford to underinvest in AI infrastructure right now. He warned that companies will get burned if they don't have enough capacity to meet demand. Alman also credited the White Hous ...

AI Investment & Infrastructure - OpenAI's AI infrastructure buildout is estimated at $850 billion, potentially requiring the equivalent of 17 nuclear reactors [1] - OpenAI's projects from the past 2 days amount to nearly half of the $2 trillion global AI infrastructure surge forecast by HSBC [2] - Alibaba is increasing its AI model and infrastructure spending, adding to the existing $53 billion commitment [6] - Alibaba is opening new data centers in Brazil, France, and the Netherlands to improve model speed and user proximity [9] Market Dynamics & Competition - The AI sector is experiencing a technological revolution requiring significant infrastructure investment [4] - Demand for AI is rapidly growing, with OpenAI experiencing a tenfold increase in the last 18 months [3] - The US is currently ahead in AI spending compared to China [7] - Chinese companies like Tencent and BU are competing with global model makers like Anthropic and OpenAI [10] - Alibaba aims to become a more self-sufficient hyperscaler in the AI competition [10] Investment Risks & Rewards - The AI sector is expected to experience cycles of over and underinvestment, with potential for both gains and losses [5] - The long-term value of AI technology is projected to be significant for society [6] - Companies are being rewarded in the stock market for announcing substantial AI investments [12] - The risk of underinvesting in AI is currently perceived as more prominent than overinvesting [14]

Sam Altman just said he wants to "create a factory that can produce a gigawatt of new AI infrastructure every week."The AI super cycle hasn't even really started yet. ...