Shortly before publishing this newsletter, I spoke with Gil Luria, Managing Director and Analyst at D.A. Davidson, and asked him whether the capital was there to build the 17 Gigawatts of capacity that OpenAI has promised.
He said the following:
No of course there isn't enough capital for all
People roll negative equity on car leases all the time.
I await the invention and then subsequent collapse of the suprime GPU leasing market.
If we are real lucky, they’ll figure out how to collateralize those loans for maximum financial damage.
I thought they already have that? At least i remember reading about coreweave or similar using their GPU’s as collateral to buy more GPU’s like a year ago.
Oh god I had not heard of that.
Well, lets hire some accountants and actuaries and get that all the way up to CDOs or a GPU-Lending futures based ETF on the DJIA/Nasdaq, I guess.
After all, its not the state of the economy after the bubble bursts that matters, its the profits you made along the way!
I think it was this one from 2022 that mentions coreweave borrowing 29 billion backed by GPUs.
especially nice given how fast they depreciate.