AI Power Plays: BTDR, GLXY, WULF & AMZN!

We track a wild week across Bitcoin, AI infrastructure stocks, and the HPC data center buildout, then connect the dots between volatility, forced selling, and what actually drives revenue per megawatt. We also break down Amazon’s AI-fueled AWS growth, key 13G institutional filings, and why BitDeer may be one of the most overlooked AI power plays. 

• Bitcoin price action and weakening momentum after base building 
• Situational Awareness unwind and what 4x leverage does in volatile small caps 
• Citadel’s role in the block trade and why timing matters 
• Daily performance check across mining and HPC names plus contract highlights 
• Wi-Fi and NScale momentum plus IPO chatter and partner upside 
• TeraWulf 13G details and what institutional ownership signals 
• Morgan Stanley’s view of undervalued capacity and the EV-to-watt lens 
• Bitdeer deep dive: vertical integration, SEALMINER economics, and HPC ramp 
• AI infrastructure constraints: grid timelines, labour shortages, rising build costs 
• Amazon earnings takeaways: AWS AI growth, capex, and customer deployment teams 

Let us know in the comment section below your top pick currently in the space? 

Make sure you pop over to the website poweranalysis.io you can sign up free to do so and we've also updated all the valuation analysis tables for each one of the companies we cover!

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Transcript

Welcome And Week Recap

SPEAKER_02 0:00

Hey guys, welcome or welcome back to the channel McNally Money, the official home of power analysis, final episode of the week, and what a week it was. We had some major ups, major downs, everything in between. We're gonna be recapping that along with the top headlines and earnings out from Amazon. Before we get into it, take a second, smash the like button, guys. Big help to myself and the channel. Anthony absolutely loves it. If you're not already subscribed, McNally Money, feel free to join. And let us know in the comment section below your top pick currently in the space. With that being said, let's get into today's episode. All

Bitcoin Momentum Starts To Fade

SPEAKER_02 0:41

right, guys, away we go. We just wrapped up our members-only weekly video. Very active in the trading accounts this week, Anthony, taking advantage of this big dip we've seen. We're actually going to talk about a potential reason for that dip in a second. First up, we've got Bitcoin on the agenda here today. $63,000 in change. We've talked about the base building. We've talked about the fact maybe we've found bottom. However, we're starting to see that little bit of momentum deteriorate.

SPEAKER_00 1:10

Yeah, um, and it's a shame. We thought we were just nicely rising away from that $58,000 there. The dip today suggests it may go down further before it goes up, but we'll pay attention to it and um keep you abreast um next week as we as we start the new week. But uh we're seeing a little bit of recovery. It did go into the 62 and a half, so there's a little bit of recovery there, back over 63. A lot of lot of volatility this week, Bryce. So uh maybe you know, uh not just with Bitcoin, but with also with markets, with stocks that we talk about on a daily basis, lots of things happening around the world. Um, and so you know, there's there's that added volatility in Bitcoin being volatile anyway, without all that news, um, just doing what Bitcoin does.

SPEAKER_02 1:55

It certainly is. Now we've got a pretty stacked lineup here. We're gonna be talking about uh Amazon earnings, specifically the AI components. We've got some price targets, some commentary

Leverage Blowups And Citadel’s Block Buy

SPEAKER_02 2:05

from Morgan Stanley on a number of your favorite companies. Before we get into that, though, Anthony, this update on situational awareness, Leopold Ashenbrenner. We've talked about him on the channel, essentially a stock picking guru. He's run up this account from literally millions of dollars into multiple billions of dollars. Seems he's run into some trouble. Yesterday I mentioned uh they're having some issues with their portfolio. Today we've found out a little bit more detail. It seems uh Citadel, the bank, potentially having a hand to play in the unraveling or the blow-up of situational awareness.

SPEAKER_00 2:44

Uh yes, and you know, the Citadel were calling for a hike in interest rates and maybe adding fuel to the fire here in terms of the impacts of what that would have done to stock markets and obviously uh specifically uh some of the tech stocks that we talk about on a daily basis. And so when you look at um the likes of the portfolio that Situational Awareness had, and we've actually got um a copy of that portfolio, um, it's interesting to see the number of companies that we talk about regularly, probably half that list there. We've we've talked about you know more than once, and and and some of them we talk about on a daily basis there. And you know, when you consider situational awareness, we're using a 4x leverage. Um, you know, in this space where we talked about you know, stocks can move 15, 20, 30 percent in a day, uh that becomes a real challenge, especially when you're hoping for the upside and we see the downside. We talked on the podcast about the 22nd of June being sort of like the last time we had a high, and a lot of stocks were at the 52-week high at that date, there and we've just seen a massive pullback, and it's just been relentless from there. So, if you had some big plays in there with the 4x leverage, um, you're gonna be feeling the pinch. And I think with that added um news and the last four days, uh, the Friday last week and the first three days this week, it was a real challenge. I looked at my portfolio and I'm like, wow, this is like uh a red day every day, and um I just knew it you know it was gonna turn, but I didn't know the reasons why. I mean, we were trying to come up with ideas why there was a sell-off, and it's quite clearly now um you know that they in their portfolio they had 45 billion dollars of uh uh stocks, and you can see you know the list of stocks in there with iron, with white fiber, with Riot, CleanSpot, Core Weave, some of the big players, Micron Technology, Nvidia, uh, you know, a real uh broad uh basket of tech stocks all in this sort of space, looking to use uh you know their chips or using power for HPC. And uh I'm afraid it came sort of crumbling down, and and and to avoid margin being margin cooled, we had to sell an interesting enough price, uh there was a ready-made seller there for uh ready-made buy for this sale.

SPEAKER_02 5:06

Well, and that's what I was gonna say, Anthony. Some calling it diabolical. Citadel, the same bank that was lobbying for those interest rate hikes, knowing that this is a very interest rate capex intense industry, uh actually came in and bought the bulk of that portfolio. I think there's around $5 billion of anthropic left, around $5 billion of maybe some other stock, but the vast majority of that actually went over to Citadel only to see yesterday's rebound. You can see on this same list, if Leopold would have held on a single day longer, he would have seen those significant gains. We talked about that day being the best day ever in our accounts yesterday, and unfortunately it came at his expense.

SPEAKER_00 5:50

It did, and um his four largest US holdings each fell by more than 35% in a month, and so therefore the software shorts ripped against him at the same time. Now, if you look at uh you know, this is a young, a young young man here. I don't think I think he's about 24 years old, uh, you know, got his degree at 19 years. He's obviously a very bright, intelligent. He worked at Anthropic before he was let go. His uh his his uh fiance uh is has got a very key position at Anthropic. He does have that five billion stake in Anthropic, and he still remains uh you know having a handful of other holdings there, probably about 10, but the number I'm hearing today 10 billion. So uh the initial seed money that went into that was around about five billion. So um they're not it's not all lost, but um when you think about it took him two years to build that 45 billion, and it's only taken him four weeks to hand the public book back to Citadel. So that's what can happen in this space. I'm afraid I don't do any sort of leverage trading myself, I just tend to buy the stocks after I've done enough uh due diligence and research and hope that I've made the right decision. And believe you me, uh we go back over six years. I've made a few absolute um diabolical decisions, but you know what? You learn from some of those decisions. I don't tend to make as many lately, but um you know, I think uh you know it it helps to have you know gone through a period where you've you know you've made some mistakes to learn from those and it it sets you up better. And maybe you know he'll come through this, you know. Again, it's not all doom and gloom. Ten billion dollars is a is a is a is a more than a lifetime's uh money for any any person there, and he's grown, as you say, he's grown that. And this space, as you can see from yesterday, we talked about you know our portfolio is having the worst day ever on Wednesday and the best day ever on Thursday. I mean, how can that happen in two days? And you now sort of like putting the piece of the jigsaw puzzle. This was happening in the background, and we just didn't know to the extent of what was happening, but it's quite clear um you know when the selling stopped and and Ken Griffin and and Citadel purchased uh his book for a uh you know a price there that was um uh you know in one block trade as well, uh a very reasonable price. I'm hearing that the potential there they made a three to four billion uh profit on that purchase immediately. Um, and you can see from the rises uh yesterday, which we covered on the podcast yesterday, and also uh as you can see from that uh that filing there, how the stocks rallied. Um, you know, there was there was uh money to be made, but there was certainly blood in the water, and the sharks were certainly circling um very much so this last three or four weeks, um, and caused that. This isn't the first time we've seen these big margin calls there. There's there's been a few that's happened in the past, but this is certainly one in our space, and we sort of like you know, we know these companies inside out, and we know that um, you know, there's not a lot uh they've done wrong. They've got some big contracts on the books, a number of those companies there. We talk about on a daily basis, you know, the likes of course scientific now are over one gigawatt of power in contracts. You've got TerraWolf and Hutt very close to uh one um uh terawatt in in in sorry, one gigawatt in contracts, and and many others getting contracts and many more to get contracts this year. We're gonna talk about you know, keel uh in a couple of weeks with the CEO uh Ben Gagnon. Uh they're gonna sign three contracts by the end of the year. This space isn't going away, and you know, the use of AI. I speak to people all the time and saying, are you using it? And they say, not really. I'm saying, but you use your phone, and AI is built into most new phones now, and they don't even realize they're using it, you know. So this is here to stay, and um, you know, this is just obviously uh this is just showing you the volatility if you go in there with leverage trading, what can happen, and it's happened um, you know, at the wrong time for for Leopold and situation awareness.

SPEAKER_02 9:49

Yeah, and a good sobering reminder, there's always a bigger fish in the sea, and when you're posting 440% annual returns, the only way you can get that is with leverage. Then you start to see some of the companies' holdings, the fact that these are smaller companies, you put the pieces together, and that's how you get these margin calls. So interesting move by Citadel. We'll see if this breeds some more life back into the space. Uh,

Mining And HPC Stocks Heat Map

SPEAKER_02 10:13

speaking of the sector itself, today I was expecting a big green day based on Amazon results last night, which we'll talk about not necessarily the case, more so in the red. We do have a few bucks in the trend, but uh nothing like what we saw yesterday.

SPEAKER_00 10:29

No, there's um and and uh a sort of I will say there's a slight improvement, but it was worse than this um in earlier in earlier trading. Um there's a little bit of a pullback, but um still you know, I would think vast amounts of portfolios will have had a bit of a haircut today in terms of you know those changes there. Uh Fufu and and and Hutt leading the way, Terra Wolf and Cypher all also in in in in in the green there, and and three strong companies we talk about regularly, they've got big, big contracts uh to all those three there. Um keel also um you know holding its head above water, but then you you start getting into the red there, and you know, you look at the two at the bottom, and bit digital and wifi, so bit digital and wifi sister company, both over seven percent, um, you know, down there, and um, you know, interesting, you know, Wi-Fi uh has had a lot of um you know interest in the terms of the sign contracts. They signed this 40 megawatt uh deal with nscale at NC1 campus, and uh that they've they've got an option to increase that by a further 40 megawatts uh should they uh get the available power there. So that's a you know, and you look at the the the uh the amount of uh revenue for that particular site there, that's we're talking $86 million a year revenue for the next 10 years. It's um these are these are sort of eye-watering amounts uh when you think about power and you think about the return on the investment of power, and um, you know, and then you see today that the markets, you know, uh you know, market them down seven and a half percent. Uh Bit Digital, which owns part of Wi-Fi. I mean, obviously there is a link there, they've got their uh Ethereum hodl and they've also got 70% of Wi-Fi also fearing the market today, also down seven percent, and Riot um uh also down six percent. Riot haven't um uh named a large client for the Corsi Carna site or added to the 50 megawatts that AMD have signed at the Rockdale facility. Remember, AMD have signed other contracts since then, and uh maybe Jason give us an update on that sort of relationship with AMD at the Rockdale, whether they're likely to sort of increase that to the 200 uh megawatts watching, but that is time sensitive. So we'll get from Jason how long they've got left to to make that choice there, but also the fact that we've been to Corsicana twice, and you know, we think it's a fabulous site, and and and you know, having been there in November last year, um, you know, uh they'd actually uh put pushed back a an offer for the for the for the for the site, so waiting for a better deal. So maybe Jason um you know uh has got more updates on that site as they're already starting to um prepare for the day centers to be built. Remember, they changed the design and uh he managed to increase the power compute power by about 50 uh megawatts, which you know that's about 80, 85 million dollars a year in additional revenues just by changing the design. Um, so you know, um be great to see a client in there. Um, it certainly is you know one of the flagship sites for any company to be honest with you. It's um it's you know it's got all the attributes there, it's located in a great position between Dallas and Austin. And um, you know, we'd like to see it a see it, see a deal and hopefully get another visit back to the to the site in the not too distant future, Bryce.

SPEAKER_02 13:54

Yeah, looking forward to that. Hopefully alongside a big deal. Now, moving into the heat map, quick here, Anthony. Standout for us, HUD 8, the only company to show green across all five bars. Uh, we'll talk about a few more of these throughout today's presentation, but again, uh nothing to write home about.

SPEAKER_00 14:12

No, no. It's uh it's you know, uh we're still trying to play catch up on the month. The month is still down an average of 12%. Uh year today and one year is still uh positive. Um interestingly, um, you know, Bitcoin seems to be full performing better over the over the one day, the five day in the month at the moment, compared to the average of everything else. So, you know, uh these stocks um you know having a bit of downturn. But we know from yesterday when we saw like at least six or seven, twenty percent up, that's what you can you can see uh in a turnaround. And um again, uh you know, I think there's plenty of potential upside in a lot of these stocks uh with the size of the deals that they've got. I think once we start, you know, literally seeing these revenues come through and these and these uh you know their their you know their net income figures start to improve because believe you me, it's been a challenging environment in the Bitcoin mining space the last four or five years for all of them. Never mind those that have got the best power cost and the most efficient miners. Uh, we'll see from these quarterly earnings how much sort of profits uh you know some of the big players have made. It's gonna be a challenge, but the HPC certainly

IPO Buzz Plus Big Money Filings

SPEAKER_00 15:25

uh brings light to the to the room in terms of strategy moving forward.

SPEAKER_02 15:30

Yeah, it really does. And we're gonna talk about Amazon really seeing some benefits from the AI uh integration or adoption in their business. N scale is another one we discussed yesterday, Anthony, in relation to an MA or strategic acquisition. Uh interesting tweet or timely tweet out from Matt Siegel, again, talking about them advancing those plans towards IPO. I had said similar to Anthropic or OpenAI, this is a major contender looking to become public. Uh Sam Tabar, though, responding saying we are the least surprised. So again, we had mentioned as these companies go public, it's beneficial to their partners. We know NScale has that big NC1 contract you just mentioned, the ability to double that to 80 megawatts. So this was an interesting tweet, and we thought very bullish as we head into earnings from Sam Tabar and team.

SPEAKER_00 16:23

Yeah, very, very bullish. And uh, you know, one thing Sam's done is is is the last few years um they've gone about the business really well. They've managed to get a whole string of clients. They were the first company to really announce um a big deal, a 50 megawatt uh deal, um, you know, um when other companies were literally just trying to to sell some of the some of the compute power from their from their GPUs that they were doing in terms of hive and iron. Um bit digital announced a big deal. And then you know, it was a case of they weren't getting that recognition from the market, and and Sam and the team decided the best way to do that is to split the company, and um, you know, they formed uh Wi-Fi, which is affected their infrastructure on there doing HPC and keeping Bit Digital really as the you know as effectively the Ethereum treasury management company, um, and also having a significant stake in Wi-Fi in terms of about seven cents of the shares. Um, we'll get Sam on after earnings, you know, and and and get his view on how he sees that at the moment there because they have sort of pulled back. There was a few weeks ago, both of those companies were significantly um uh higher in terms of stock price and market capitalization. You would say it was certainly was working there, but just it doesn't take long in this space. The volatility brings things back down to worth. And as we can see today, you know, a bit another decline as we saw in in early in the week with with all the stocks as well.

SPEAKER_02 17:52

Yeah, you're right about that. Now, speaking of earnings going into next week, a lot of companies are reporting. I think we have four or five interviews already scheduled. One of those is Patrick Fleury, CFO of TerraWolf. We've been talking a lot about these 13G filings, basically the big banks disclosing their public positions or portfolio positions. You found another one today for TerraWolf.

SPEAKER_00 18:15

Yeah, and um um yeah, when companies start issuing their 13Gs, you can see then you know who's actually institutional-wise invested in Vanguard portfolio management of um have got a total of just over 22.4 million shares in a company. That represents, you know, 4.5%, 4.52% of the company, significant amount of the of the stock there. So they're obviously voting um you know positively towards the management team there in the future. And uh again, you know, um this will be one of many institutions that will be releasing their documentation as we go through the next few weeks. Uh, but Vanguard this time, and uh we saw some early in the week from from BlackRock, and we'll cover one uh towards the end of the podcast as well, um, you know, uh located on the minor there. So lots of institutional investment uh around there, and that helps with in terms of you know raising the capital as well. I mean, 22 and a half million shares, not too shabby.

SPEAKER_02 19:15

No, not at all. Speaking of institutions, Morgan Stanley, Steven

BitDeer Breakdown And Why It’s Overlooked

SPEAKER_02 19:20

Bird, uh their analyst that covers the sector. He was on Power Lunch CNBC just recently here, talking about a few of these stocks, including Wolf. We'll play you a quick clip here, Anthony, and then I wanted to get your thoughts on one of his top recommendations. So is there any other companies aside from Galaxy, dead investors right now, or overlooking? You raised your target on Cypher, you raised your target on TeraWolf, you're bullish on Galaxy.

SPEAKER_01 19:47

Yes. Anyone else we're missing? There is one that trades very cheaply that's been overlooked, which is BitDeer. BTDR trades at a very low EV to watt basis.

SPEAKER_02 19:56

So you can hear there he talks about Galaxy, Cypher, TerraWolf. We'll cover those in a second, but he specifically calls out BitDeer as having one of the lowest EV to watt ratios. Now, we've talked a lot about BitDeer's pipeline here, Anthony. I wanted to get your thoughts and whether or not you agree.

SPEAKER_00 20:13

Um they they've got a significant um I won't call it a pipeline because a pipeline suggests they're still sort of like in the process of of maybe um you know finalizing power. What we're talking here about is they've got of their you know three gigawatts of power, they're actually utilizing 1.74 gigawatts uh for their current Bitcoin mining and HPC um strategies. Now the pipeline they've got there is effectively sites that they're working on at the moment, so uh and they've got a very, very uh stringent calendar as when these are all coming on. So if you want to know more about that, go on to their monthly update, which covers a mass of a multitude of information about what the company's doing, not just in terms of power, but in terms of mining, in terms of HBC, in terms of production for machines. Um, you know, this is probably one of the very few fully integrated um companies out there. When you talk about they own power now, they've bought uh their own power sites there, they're Bitcoin mining, um, they're now moving in strongly into HPC. They've highlighted all the sites that they're going to convert to HPC, and they're currently uh now very quickly uh finalizing the deal at Tiger. That's a 225 megawatt site there, but they have a number of sites, they've also highlighted how much um in uh HPC um revenues they're receiving, and that's quite significant, that's grown quicker than some of the other companies around them as well. And I thought they just had you know a small amount in Singapore, but they've literally expanded more into Malaysia, and we're already seeing 65, 70 million. um average revenue run rate so already and we haven't even got uh you know the big the big uh deals coming online but tide will be the first of those that's imminently about to sort of like commence and then you've got a whole string of of other uh sites that are being prepared um including rockdale at Texas there um but uh for me you know uh you know the fact that it's that fully into vertically integrated there we've talked about the self-mine they've got the largest self-mining hash rate of all the companies the public mining companies in North America uh they literally uh sneaked up on everyone and blew past everyone we were talking for probably about 12 months about clean spark and about iron going to that 50 um exah Mara had always been sort of the largest miner and they got to 50 and then got to 60 exahash and riot like Mara both benefited from that early capital raise of the NASDAQ the first two companies on there and they got to you know I think they're over 40x hash at the moment but nobody was really watching BitDeer and the fact that they were able to produce their own machines I mean BitDear as as most of you'll know you know four or five years ago were part of the Bitmain company and then there was a disagreement with the two co-founders and Ji Hanwu took his part of the business away and took about 150 RD people from from the company and then they set up uh to start you know doing their own designs creating their seal miner probably the best name for any of the miners I've seen out there at the moment and not just designing one model there they've designed and now are actually producing seal miner um the the A4 model there which is you know the first miner to be under 10 joules per terash in terms of efficiency I think nine and a half joules uh per terahash which is an extremely efficient mining and the great thing about BitDeer is they can sell these machines because it doesn't cost them uh that much to produce them so they make a nice margin if they sell and if they don't sell they're putting them in their facilities and they're growing hash rate very very quickly so they've got the best of both worlds there they're now fully focused on these co-location data centers and we can see from the AI cloud there they've got very strong relationships with Nvidia uh especially um in Asia and uh you know as they're expanding you know their business over in Asia there it's great to have that alignment now they are building um a production facility in the US there which is going to help them avoid any tariffs going forward remember uh the president said if you're going to start bringing in products to the US be prepared to pay tariffs uh bit did obviously thought very quickly about that and they've decided to build or start to build a facility that they can then produce the machines for distribution in North America where you know effectively 30-40% of all Bitcoin mining is done and when you've got some of the most efficient machines that's the only way Bitcoin mines going to work going forward having these efficient machines and trying to get that power cost even lower than it is at the moment Bryce yeah well said and some really bullish commentary around BitDeer now we talked about 13Gs earlier in the presentation uh wanted to give an update there as well yeah so BitDear issued their 13G um to highlight uh the fact that um uh Blackrock had had announced in their accounts that they held um over 10 point five uh million shares representing about 5.3% of the company so again you can see um you know just like Morgan Stanley and Steven Bird you know articulating that he felt one of the hidden gems out there and I I I agree with him in terms of the fact that you know they do get overlooked. We've cut them on the channel for three years and uh hopefully we've provided some you know some help to people with their due diligence um but we certainly um you know um uh know exactly what the team I've met the team in Singapore as well so I've been over Singapore I've met the team over there and you know spent four hours with their uh head of business strategy talking through you know a number of their initiatives that they were they were looking at at the time there and they they've delivered you know that that they've delivered four versions of SEAL miner in the space of a couple of years they've raised that uh HPC revenue very very quickly to well over 65 70 million uh dollars in annual annualized revenue and that's going to ramp up as soon as we see that um uh start delivering at the tidal facilities there 225 megawatts suggest very much close to 200 megawatts of compute power they won't need uh a massive amount of auxiliary power not in Norway it's it gets fairly cold there most of the year round so they won't have to rely on as many cooling systems that they're having to other companies are having to use and uh BitD would have to use at the Rockdale facility in Texas where we have been and uh we found it a bit challenging there in terms of weather.

Power And Labor Bottlenecks In AI Buildouts

SPEAKER_02 27:06

Yeah pretty hot in Texas for either one of us now Steven Bird's been pretty active we have some notes from his most recent uh interview here talking about insufficient power to meet planned data center build out and we've also found a few audio clips based off uh podcast they just put out entitled Blind Spots in the AI infrastructure sell-off so we've got two here Anthony that caught our attention I'll play them both and then we can ask you some questions.

SPEAKER_01 27:34

The scale is striking industry leaders estimate that compute demand could double every six months which would amount to more than a thousandfold increase in compute over five years. Hyperscalers could quadruple available power capacity to roughly 120 gigawatts by 2028 from about 30 gigawatts in 2025. Grid connections can take five to seven years in some regions. Skilled electricians, welders and pipe fitters are in short supply and local opposition is increasing as communities debate electricity bills, tax incentives and who should pay for grid upgrades. These are real obstacles but we view them as delays rather than dead ends.

SPEAKER_02 28:15

So Anthony again you can hear him talking about this exponential demand for compute doubling potentially every six months then going on to talk about one of the components we have the fact that actually bringing these facilities online finding the people to put the buildings together becoming increasingly challenging.

SPEAKER_00 28:35

Yeah absolutely um you know we we have seen the demand grow uh we have seen these contracts been signed extremely quickly we saw two years ago Core Scientific start the process with the big co-location deals and now they're coming through a bit more fast and furious and the rates seem to be increasing we've certainly seen recent rates uh we talked about one earlier the N-scale deal there that's one of the best rates on the market um with uh with with wifi benefiting from over two million dollars per megawatt that's certainly a benchmark um if you're getting over that TerraWolf managed to get 2.35 million dollars per megawatt on their latest deal for their 401 megawatts that they've just signed up with AMD and so you know plenty of um opportunity in the space here and that growth is incessant I mean uh you know Dan Roberts came on the podcast he talked through uh his numbers at the time in terms of what we were using at the moment to deliver um HPC and what the market really needed in the next four or five years and believe you me that figure in the next four or five years that seems to be doubling and and trebling every time we see another number uh the latest number I think we saw in the podcast is sweet price was about 200 gigawatts um by 2035 which is a which is a massive number from where we are today but you know fortunately some of these companies we talk about on a daily basis they have power and they're now shifting that towards HPC and hopefully we'll see some of those um signed off there and the second part obviously you know we talked about a lot we talked about the you know the fact that you know you need this expertise you know you need electricians you need pipe fitters you need all these tradespeople and everybody's wanting the same tradespeople all at the same time now if you're fortunate and you're in a region where you have a sufficient supply of tradespeople and we know Ben Gagnon articulated that when we asked him on the last podcast and that's not the same for every area. Some of these areas that we went to in Texas um they are uh you know in the middle of nowhere and and you have to you know incentivize um people to come and work there when we were at the childress site Iram were was saying that some of their staff are driving more than an hour each way just to get to work that's the catchment area I've been in that position before and I I ended up um you know stopped doing I had to move uh you know it was just too much for me. Core Scientific went on better and they they've started to actually build uh accommodation at their sites to enable workers to work there during the week and then they can get away at the weekends and and you know so there's no time lost they can utilize that time there to to spend more time on site not having to have an issue with travelling but they're building sort of like that porter cabin type accommodation we'll see more and more companies probably go down that route once one starts it um you know other companies will do it and I said about the cost of that and I said yeah we can build that cost we can fax that cost into these deals um you know it's it's worth doing that than paying the extra cost of people having to you know be uh you know enticed to come and travel uh further on a daily basis so we're seeing these costs go up and also call scientific raise their guidance on cost per megawatt for building these sites from eight million per megawatt to twelve million per megawatt and when you see these latest deals now they're sort of

Amazon Earnings And AWS AI Growth

SPEAKER_00 32:10

heading towards that 12 million so it's not just core scientific they were the first ones to highlight it other companies now are agreeing with them and saying yeah gone are the days where it's eight to ten or nine to eleven twelve seems to be the number and maybe that number rises if we have a significant shortage in some of these trades as we start you know trying to reach the levels of of demand uh or or levels of supply that the demand warrants um and we know it's big big numbers Bryce it is yeah and those uh staff housing you see that a lot in the oil sands or in major infrastructure projects traditional mining but it gives you a sense of the scale of these data centers and what these guys are building speaking of scale Amazon one of the biggest in the world we know AWS significantly involved with AI uh both internally to Amazon and selling it as an external product or add on they came up with earnings last night we were hoping they would guide bullish on AI similar to what we saw out from Meta and Microsoft earlier in the week and actually Anthony they didn't disappoint citing their fastest growth since 2021 specifically related to AI and chip demand. Yeah I mean some impressive numbers here I won't dwell on all of them but when you get revenues of 200 billion in a quarter um it's sort of mind blowing we don't normally cover companies doing this level here we we I think we we covered Nvidia when they gave out their previous quarter earning I think it was a similar a similar figure um and when you get down to like the net income of 62 billion I think there's some sort of um there's some benefits this particular period there because if you go down to the bottom of that slide you can see that the guidance for next year is of a similar amount there remember when you're building and growing your investment to deliver HPC you're gonna take one two years before the revenue start to flow through so don't think you know they should exponentially be growing every every minute you it takes time to build these facilities it's going to take 12 18 months for a sizable facility to be built there we've been to children's November last year and they were already had the steel frames up for horizon uh one and two and horizon one is a is now imminently bounced hand over but you've still got horizon two three and four to be completed that's just 200 megawatts you know Amazon will be dealing in sort of you know big big big facilities there so if you look at the operating income guidance for Q3 that's at about 22 to 26 so for my intents and purposes I think there's a there's maybe some like one-off benefits in this particular financial period that's raised that net income but um even if you're getting you know 22 26 billion uh you know effectively 12 13 percent of your uh revenues that's very good I mean we're seeing you know some some of the companies with the mining there probably around the 20 million maybe 30 million in the quarter and making significant losses against that this is nice uh to see these hyperscalers and they all these hyperscalers they're making significant we had uh effectively Microsoft and meta results um earlier this week um and also covered uh applied as well as they brought their results out and they're extremely impressive uh this is the start and you know that we see these numbers now we're seeing the companies that we talk about daily moving to space this is what the hope is on a sort of like you know on a small smaller scale we're not going to expect to see companies regime 200 billion now but what's to say in 10 15 years when you've got sort of you know eight nine ten gigawatts of power um uh providing hp hpc it wouldn't be you know uh too far removed to to see some some really uh high income figures and high margins coming off those income figures for many of the companies that we discuss. Yeah I don't think you're too far off there Anthony they are citing AWS as a business unit could be a $1 trillion dollar a year uh revenue opportunity also increasing their capex from 200 to 220 billion for 2026 and I know you've got some specific points on AWS showing triple digit growth in many of their divisions yeah they've exceeded the uh revenue run rate for AWS um uh uh of 25 billion a year um so yeah exactly the trip growing triple digit percentages and they've also announced an investment of 1 billion to create AWS for deploying engineering which is a team of engineers embedded directly with customers to co-develop and deploy a Genic AI solution in days rather than months and they've expanded their ads agent which is an AI powered tool that simplifies planning launching and managing advertising campaigns and turns hours of settled into literally minutes um to 11 countries so far this year advertisers using ads agency 8% lower cost per impression and 6% lower cost per acquisition than those that don't use it. So really impressive and I'm blown away by the numbers um you know it's great to see these big big numbers here and I would imagine you know the the staff at that company are getting well rewarded for achieving these numbers as well and you can see from you know the share price today uh it's had a bit of a hike there Amazon up 15% uh to $270 um and quite a lot of green on the day change uh for the Mag 7 compared to what we've seen um with the North American um Bitcoin miners turning to HVC brands yeah and you got to think if some of the biggest companies in the world can move 15% in a single day on AI news think about what the stocks we cover can move uh case in point yesterday.

Newsletter, Valuation Tables, Weekend Wrap

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