Summary of Key Points from the Conference Call Industry Overview - The hyperscaler industry is experiencing significant capital expenditure, with plans exceeding $3 trillion on data centers over the next three years, which is more than double their combined cash flow [48][49] - A substantial portion (40-50%) of hyperscalers' capital expenditure is allocated to Nvidia GPUs/Servers, raising concerns about potential adjustments to financial statements and market values [49] Company-Specific Insights Nvidia - Nvidia's product cycle has shortened to just one year, indicating rapid technological advancements [5][6] - The CFO of Nvidia, Colette Kress, emphasized the long useful life of Nvidia's CUDA GPUs, which is a significant advantage in total cost of ownership (TCO) [12] - There are concerns regarding the depreciation practices of Nvidia's customers, with allegations that extending useful lives of chips may inflate profits and overvalue assets [10][29] Alphabet - In 2023, Alphabet changed its AI buildout depreciation policy to a longer 6-year useful life, resulting in a $3.9 billion increase in pre-tax income [50][51] - This change raises questions about the valuation of Alphabet's new AI infrastructure assets, which may be overvalued and face potential write-downs in the future [52] Amazon - Amazon extended the useful life of its assets from 4 to 6 years between 2020 and 2025 but reverted to 5 years in 2025 due to rapid technological advancements [54][55] Microsoft - Microsoft is also considering the pace of chip technology development, with CEO Satya Nadella expressing concerns about overbuilding infrastructure for rapidly evolving generations of Nvidia GPUs [60][61] - Despite this, Microsoft continues to depreciate chips and servers over 6 years, which may not align with the rapid advancements in technology [65] Financial Implications - The extension of useful lives for depreciation purposes can lead to reduced depreciation expenses and inflated profits, a practice that has historical precedents in corporate fraud [10][44] - The analysis indicates that the potential earnings overstatement for major companies like Microsoft, Meta, Amazon, and Alphabet could be significant, with estimates suggesting a range of 10% to 32% depending on the useful life of chips/servers [68] Additional Considerations - The competitive landscape is evolving, with well-funded companies like Alphabet, Amazon, and Microsoft posing challenges to Nvidia's market share [54] - The implications of these financial practices and market dynamics could lead to significant adjustments in asset valuations and earnings reports in the coming years [49][52][69]

I want to get to one more move though. Um, out of the the finance the financial space. Uh, Bin, you bought more of Blue Owl Tech Finance F.We really were watching BDC stocks very closely over the last month at least. Uh, and they all had a bad month. All all of them.Why are you buying more. So I think when you look at how people underwrite debt, right, whether it's Kimco, whether it's Blue Owl, you really have to or Apollo or Aries etc. who's doing the underwriting and do you have confidence in that team. A ...

Group 1 - The financial space, particularly BDC stocks, experienced a challenging month, prompting increased scrutiny from investors [1] - Confidence in the underwriting teams of companies like Blue Owl and others is crucial for investment decisions, with a focus on their strategies [2] - Blue Owl Tech Finance has a significant portion of its portfolio in senior secured positions, with over 80% being profitable companies, and a net asset value (NAV) close to 17 [3] Group 2 - There is an expectation of a 20% to 25% total return on Blue Owl Tech Finance over the next year, driven by potential price appreciation and yield [4] - The market sentiment is perceived to be incorrect regarding Blue Owl's underwriting capabilities, indicating a strong belief in the company's strategy [4]

Jefferies Financial Group Inc. is making its first foray into Saudi Arabia’s private credit space, leading a $125 million financing deal for finance startup Erad https://t.co/YYcBf66YZy ...

BlackRock, the world’s largest asset manager, had big ambitions for Asia’s private credit market. But things didn’t go quite as planned. https://t.co/bQpEIw5lbQ ...

Core Viewpoint - Apollo Global Management's CEO Marc Rowan argues that concerns regarding systemic risks from adding private assets to retirement and insurance portfolios are exaggerated [1][3]. Group 1: Private Credit and Transparency - Most private credit held by insurers and pension funds is rated investment grade, countering the perception that this asset class lacks transparency compared to traditional loans [2]. - Apollo's exchange-traded private credit fund with State Street Corp. offers daily price updates, enhancing transparency [2]. - The firm has traded $6 billion in its investment-grade private credit business, showcasing its significant involvement in this sector [2]. Group 2: Industry Dynamics and Investment Strategies - Alternative asset managers, including Apollo, have increasingly acquired insurers to secure a stable source of long-term capital for investments, with Apollo being a pioneer in this model through its insurance arm, Athene [4]. - The close relationship between private equity and insurers has come under scrutiny, especially as insurers traditionally invested in more liquid assets like high-grade bonds and stocks [5]. Group 3: Economic Concerns and Capital Shortfalls - Economists at the Bank for International Settlements estimate that publicly traded North American life insurers could face a capital shortfall of approximately $150 billion in a severe economic downturn, a figure that has more than tripled over the past two decades [6]. - UBS Group AG Chairman Colm Kelleher expressed concerns about looming systemic risks in the insurance business, which Rowan refuted during Apollo's third-quarter earnings call [7].

Joining us to talk more about the AI trade in the markets in the Fed, Sonali Basic is here, chief investment strategist at I Capital. Congratulations on the gig by the way. It's great to have you.>> Um maybe we could start with the Fed because we were just having a conversation about Fed odds, the Nick Timmeros piece in the in the Journal today, maybe carving a path to at least a hawkish cut in December. Does that make sense to you guys. >> It did because if you think about the case for cutting in December, ...

BlackRock wants to extend the investment horizon of its second Asia private credit fund https://t.co/CATq7RdkxF ...

Core Insights - The private credit market has experienced significant growth, quadrupling in size over the last decade [1] - Despite recent high-profile credit defaults, the perception that private credit is inherently risky is challenged by industry experts [1] Market Growth - The private credit market has increased fourfold in the past ten years, indicating a robust expansion in this sector [1] Risk Perception - High-profile defaults, such as those from Tricolor and First Brands, have raised concerns, but industry leaders argue that private credit does not equate to high risk [1]

A boutique private-credit firm set up by former Credit Suisse bankers has agreed to provide a lending facility to support a new carbon program in the Bahamas https://t.co/lS8foRdDaW ...