00:04:44 · Anthony Pompliano
[00:04:44] S1: Now when we go and we look, I think Texas maybe is the area that people have spent the most time on. You've got a democrat governor who is now the elect. She has been pretty open about wanting to create this moratorium. What's interesting to me is there's nuance here. Right? We obviously have, the outgoing governor. There is, like, maybe a pause. It's not like a true moratorium where they're not gonna go and and create more, but there's this, like, slowdown intentionally being done by the government. And Texas is important because there's a lot of data centers that are supposed be built there. Think something like 13% of all data centers planned in The United States, just in the state of Texas. And so when I look at that, it almost feels like less of, a zero to one. Hey. We were building tons, and now we're going to a complete moratorium. And more of this, like, okay. There was already a slowdown happening, and now we're gonna get an extension from a timeline perspective. And that continued slowdown or, like, the the belief that there is going to be a longer pause or slowdown is really what's giving people some heartburn. Now do you think that those data center providers or builders that maybe don't yet have broken ground or haven't actually gone and started, they're just like, well, let me pick up from Texas and let me go to, you know, some other state where maybe they're a little bit more open to these data centers? Or does it feel like they're just gonna wait it out and they say, hey. Maybe it's gonna take three, six, nine, twelve months, but I'll still build the data center. I'll do it in Texas. It's just gonna take a little bit longer?
00:06:02 · Ron Biscardi
[00:06:02] S0: Yeah. It... It's a great question. I feel like the... For... If, you know, if you're in the data center construction business, it's like your options just keep shrinking. Right? There were there were... I mean, the biggest cluster of data centers is actually Northern Virginia where, you know, for years, data centers have been built there. And really successfully, it's actually been a huge benefit to the counties in Virginia. You know, they've... They're... It's one of the few spots in the country where they were able to lower real estate taxes because the data centers have provided such huge tax revenue. So my guess is... I mean, look, this AI thing is moving at an incredible pace. Right? I mean, every... You know, we've been watching for the last two or three years, every time a new model comes out, it leapfrogs the the the capabilities of the model that came out a month or six weeks earlier. Know? So it... It's an industry that has to move really, really fast to remain competitive. So my hope is that at least the data centers that have already been permitted are not gonna be slowed down. Right? If they've already gotten governmental approval, let those move forward. And by the way, Texas is an enormous state with a tremendous amount of real estate, and it's the center of our energy industry. So what do you need to run a data center successfully? Lots of energy. So here you have the center of the oil and gas industry for our country. Putting the data centers there makes complete sense. There's a tremendous amount of open land. So, you know, it's one thing if you said, hey. I wanna start dropping data centers into metropolitan areas. That I totally understand can create a whole bunch of issues that people don't wanna deal with. But if we're gonna start slowing down data centers in, you know, vast open areas of the country, I just don't understand the logic behind that. So I hope that the that the way the incoming administration in Texas will approach it is to make good logical decisions for the industry and for the good of the state and the country versus just capitalizing on what has become a a political issue. I I suspect that the folks who have not been permitted yet are absolutely gonna start looking at alternatives. I'm not really sure what the best alternatives are.
00:08:24 · Ron Biscardi, Anthony Pompliano
I guess we'll start to see what shakes out and which states kinda raise their hand and say, hey. We'd love for you to put your data center here. But, yeah, my guess is if they drag their feet, I think that this industry is just moving entirely too fast. They're not gonna they're not gonna sit around for twelve months to wait and see what happens. I think I think in AI years, that's like an eternity. [00:08:49] S1: Well, know what's funny is, obviously, Elon Musk, SpaceX has talked about doing these orbital data centers. I think at first, was kind of a joke. Then all of a sudden, was like, well, maybe we can do this. Now they are betting a portion of their company on being able to actually build, launch, and, and operate these. But when you see this, it kinda almost feels like that's the natural conclusion. Well, like if the people on earth are gonna give us a hard time, we'll do it off the earth. Right? [00:09:14] S0: And exactly. [00:09:15] S1: Look, I don't know. Maybe it's better. Maybe it's worse. You know, there... There's all kinds of trade offs in terms of the latency or, you know, all of sudden there becomes a lot of space traffic, you know, which is something that people don't yet talk about, but I think it'll become a big, big issue. But from that perspective, like, is that kinda what happens? It's just entrepreneurs figure out a solution regardless of what the politicians do?
00:09:33 · Ron Biscardi
[00:09:33] S0: Oh, I I have no doubt that that the engineers at SpaceX are working triple time to figure out how to get data centers, like, working in orbit as fast as possible. Because Tesla's... Tesla and SpaceX, their entire future is tied into the success of AI. I mean, in a in a major way. I mean, I own a Tesla. I own a model y. I absolutely love this car because I don't really drive anymore. This self driving is so amazing. I literally get in the car. I hit the self drive button. It takes me where I need to go. It's definitely a better driver than me. It has three sixty vision. All of that's happening because of AI. And as more and more people use these tools, it just creates greater and greater demand. So I'm sure that SpaceX is gonna do that. By the way, there's really not a latency issue. There's actually much more of a latency issue in the terrestrial. Like, if you think about the cell phone system, the number of hops that your call has to get through and the number of devices is enormous compared to what it would be if you were end to end through the SpaceX network that they've they've talked about building. So, you know, especially with the laser technology, they've already demonstrated they can... They know how to do in the current Starlink network. I don't think latency will be a problem at all. There's a bunch of other engineering issues they have to figure out, but I I suspect if if they can get that working in the next three years, call it, I think it becomes a serious competitor. Because once you get it working, now it's just a matter of how fast can we build these satellites and launch them into space. And with the Starship platform getting closer to becoming a production vehicle, they'll be able to launch. I I think one Starship can put up the equivalent of, like, three falcons worth of satellites. You know, they'll be deploying... I think it's around a 100 satellites per launch. And if he can get Starship launching as frequently as Falcon, which is right now, I wanna say they're doing about a 100, a 110 launches a year, tripling the capacity on each one of those launches would really make SpaceX a serious competitor in that space. So I I have no doubt that they are working overtime to solve that problem.
00:12:00 · Anthony Pompliano
[00:12:00] S1: Let's keep talking about these institutional investors and kind of how they're feeling about the market. If we stay on the AI theme before we get to maybe crypto or other things, what about Anthropic? Anthropic was supposed to come out at 2,000,000,000 or, excuse me, 2,000,000,000,000 with a t. Mhmm. And now they're gonna come out at 1,500,000,000,000 or so. We saw OpenAI. They were gonna raise 30,000,000,000. Now it looks like they're gonna try to raise 20,000,000,000. Are are these companies kinda cooling off a little bit? Are institutional investors souring on them in any way, or are they just as excited about, you know, the leading large language model labs?
00:12:30 · Ron Biscardi
[00:12:30] S0: Well, I'll say this. The the, you know, the market is moving so fast. It's always hard to know where... Exactly where the sentiment is. And you know, you've seen a little bit, I would say more concern in the market as to whether or not we're in a bubble and how close to the bubble bursting if we are in a bubble. But then this election result, I think primarily as a result of what will now be divided government, sent the stock market on a tear yesterday. So it it is hard to really know, but I can tell you this. Venture investing, which is where Anthropic sits, right, they they were a venture funded company, venture funds have had an incredibly hard time. The top top funds, this doesn't apply to the top funds, can pretty much always raise money. But as an asset class, venture has had a really hard time raising money for really the last three or four years, and it's primarily because their funds couldn't achieve liquidity on the on the investments that they made, even the ones that were really successful. I mean, SpaceX is actually a great example of this. SpaceX is about twenty years old. So here you have this company that in any other era of our stock market over the last hundred years would have gone public like fifteen years ago probably. Didn't go public because of the the change in our public markets and this whole process and and also the availability of capital in the private markets has been so much larger. Companies are just staying private much, much longer. But what it's created is a lot of anxiety for the institutional investors who are used to... You know, if you're an institutional investor and you like your venture fund and you you generally invest, call it $10,000,000 per fund, what you're counting on by fund three and fund four is that funds one and two are starting to exit their investments and you're taking the cash flows from those investments and you're recycling them back into the future funds. Well, if those cash flows don't materialize, you know, now you need to find other sources of cash. You know, if you're a pension fund, it's the retirees or... Not the retirees, it's the future retirees who are paying into the plan. Wherever your cash flows are coming from, they're not coming from your investment portfolio.