The Compound and Friends
00:27:05 · Josh Brown, Michael Batnick, Daniel Clifton
[00:27:05] S2: Daniel, put that... John, put that chart back up. [00:27:08] S0: Are... Michael, what are we looking at here? Well, this is what we're just talking about, just where data centers... People decided, nope. No, thanks. [00:27:14] S1: No. Thank you. [00:27:15] S2: Okay. What is it about... It looks like North Dakota won? Is that what you're saying? [00:27:21] S1: Yeah, but the one that there were two I think there are two that are going to win. Maybe one of them that are going to win they weren't really meaningful data center initiatives. The big ones, the ones that people were focused on where there's actual real data center projects and they were trying to limit those, particularly in Ohio, those were getting shot down, and that was a real sign of where the populace is. [00:27:41] S2: And that means it's over? No appeal? No legislative process? [00:27:46] S1: Think the meta statement was, we're going to evaluate our options. So I think the companies are figuring out, hey. Can we go back into the town? Is there things that we work out? [00:27:56] S2: We pay? I wanna ask you about what what is different about Louisiana. Yeah. That's the Beignet project [00:28:03] S1: Yes. [00:28:04] S2: Which is also Meta. Is Oracle there too? [00:28:06] S1: I don't know if Oracle's there, but definitely Meta. [00:28:08] S2: Alright. So... But what is different about the climate in that state that is enabling that to go forward without any problems?
00:28:08 · Josh Brown, Daniel Clifton, Michael Batnick
[00:28:08] S2: Alright. So... But what is different about the climate in that state that is enabling that to go forward without any problems? [00:28:14] S1: Part of it, number one, is that they can go behind the grid. They can actually segregate the electricity away from the consumer. [00:28:20] S2: Okay, so the consumer's not paying, Right. Quote, higher [00:28:23] S0: you just... Why can they do that? And others can't... [00:28:24] S1: We have the PJM interconnection in the Northeast, so everything is mixed into electricity load, and so it creates confusion. I think other states are going try and go this direction, but they're not there yet. The second is that Louisiana is embracing the jobs. And third, there's been a better PR movement, like teachers getting $50,000 salaries. I authored a study in April that showed that if you have a data center, they pay your property taxes. And what that does is it leads not only to lower property tax, which dwarfs any electricity increase, but it creates demand for housing. Because let's just say I live in Loudoun and you live in Arlington. Loudoun has data centers. Arlington doesn't. Okay? 40% of my property tax is now being paid for by the data centers. [00:29:09] S2: Yours is zero. Does anyone know this? So Like, people. Do any regular people know this? [00:29:14] S1: No. Because there wasn't an education campaign [00:29:17] S2: Oh, about god. What's wrong with these guys? Right. But here's what's happening. Podcasting twenty four hours a day. Nobody could bring this up.
00:29:17 · Josh Brown, Michael Batnick, Daniel Clifton
[00:29:17] S2: Oh, about god. What's wrong with these guys? Right. But here's what's happening. Podcasting twenty four hours a day. Nobody could bring this up. [00:29:24] S0: Repeat the point. Wasn't paying attention. Yeah. No, I'm just kidding. [00:29:26] S2: I'm just kidding. [00:29:26] S1: Okay. Guess what it does though? Even if you don't know this? [00:29:31] S2: Hold on. Wait, this is crazy. So all of these data centers that were proposed and now don't look like they're going through. Yeah. The construction project, if they had gone through and they eventually... They would be paying portions of people's property tax. Yeah. And nobody is informed about this. Correct. So Chamath is doing eight hours of podcasting a day. Yeah. He didn't think to mention this? [00:29:56] S1: No. I don't listen [00:29:57] S2: to David, it but I'm saying like all of these... They're all going on podcasts. Yeah. Jensen. Like, they don't stop talking. They didn't think to make [00:30:06] S1: How this does this data center benefit you? The property tax rate in Loudoun County has come down ten years in a row. I'm a public finance economist. That's how I started my career thirty years ago. That's not happening anywhere in the country. And so what it does is it creates demand for housing in the data center counties. Yeah. Okay? And it raises property values because the local property tax, the lower tax is capitalizing into home value. The home value differential is like $20,000 per homeowner. It's massive.
00:30:06 · Daniel Clifton, Josh Brown, Michael Batnick
[00:30:06] S1: How this does this data center benefit you? The property tax rate in Loudoun County has come down ten years in a row. I'm a public finance economist. That's how I started my career thirty years ago. That's not happening anywhere in the country. And so what it does is it creates demand for housing in the data center counties. Yeah. Okay? And it raises property values because the local property tax, the lower tax is capitalizing into home value. The home value differential is like $20,000 per homeowner. It's massive. [00:30:37] S2: So... Okay. But but but the trade off, people don't What? Right. People don't like the idea that the water use Correct. Don't like something humming in the woods Yep. Near where they live. Absolutely. Those are all very legitimate reasons for opposite. So I don't want one on Long Island. [00:30:53] S1: Correct. [00:30:54] S2: I might have one. I don't know about it. But if they were talking about building it, I don't think I'm like, yeah, do it. Yep. So, I understand all of that stuff. [00:31:02] S1: I totally get it. So, I did this study, and I spoke to a union pension conference where all the workers, you know, and I got like a standing ovation. It's the only speech I've ever given in my life. People are like standing ovations. [00:31:12] S0: What were they clapping for?
00:31:12 · Michael Batnick, Daniel Clifton, Josh Brown
[00:31:12] S0: What were they clapping for? [00:31:13] S1: Because I was making a case for data centers, but I wasn't doing it in an advocacy way. I'm like, This is what you need to know if you're into this. And it was a great speech. They, like, booked me for the next year right after that, right? And then I went to Iowa, and I basically did, like, pros and cons, a much more balanced type of presentation. [00:31:31] S2: But wait, who's the audience? [00:31:32] S1: High net worth investors in Oh, [00:31:36] S2: I'm sure they're all clapping. They all want it. [00:31:38] S1: They were pulling... I thought they were going to storm me off the stage and rip me out of there. My Okay? And then I speak about the most controversial political topics, like Donald Trump versus Kamala Harris in San Francisco and say Trump's got a chance to win and nobody got mad. Okay? But I mentioned data centers in Iowa, and I'm answering your question, Well, is it going to give me cancer? Yeah. Well, I have no idea. Well, then I don't want it. Right? I [00:32:03] S2: totally get that. [00:32:03] S1: What about my water? I thought I could solve this through economic issues. And you start to realize the concern is non It's economic [00:32:12] S2: health and the climate. Not the climate, the ecology. Ecology, Yeah. What about the pivots calling them compute campuses? Unbelievable. Is that gonna catch on? Come on. [00:32:21] S1: Come on. Like, going from the estate tax to the debt tax is effective. Compute campuses. [00:32:28] S2: So You don't want a compute campus?
00:32:28 · Josh Brown, Michael Batnick, Daniel Clifton
[00:32:28] S2: So You don't want a compute campus? [00:32:30] S0: I'm curious about your reaction in the stock market. So Yeah. Sunday night Yep. As soon as the Texas gubernatorial race flipped Yep. The market did a nosedive. [00:32:39] S1: Correct. [00:32:39] S0: The Nasdaq was down 3% in the after hours. Alright. I went to bed. I woke up, and futures are ripping. Yep. And I'm just like, LOL, of course. [00:32:45] S1: Yep. [00:32:46] S0: And as I'm sifting through the narrative shift, it made sense. It actually made sense. Almost all the time when prices flip, we'd laugh about the narrative ten hours ago. It made sense. Okay. Democrats won and therefore data center activity is going to go down. Sell the stocks. That made sense in the after hours. Then people woke up and said, Hey, wait a minute. Actually, we hate the AI trade. We hate all the spending. We hate the negative free cash flow. Let's get back to normal. Actually, this is good. Okay. So on Monday, we had a great day in the stock market, but NVIDIA did fall Yeah. Three [00:33:20] S2: The day after the election was Wednesday. [00:33:22] S0: Sorry. Hold on. Let just start by question. John, chart 15. So what's today? Today's Thursday? Okay. So whatever. So this was yesterday. Yeah. So yesterday, we had this really bizarre day where the S and P was up 1.7%, and NVIDIA and the semi stocks got murdered. [00:33:36] S2: Yes. Okay.