NEWS TAKE: China's Optical Ban, Volta's $10B Anthropic Deal, AMD's Earnings

Austin Lyons and Vik Sekar break down three stories that hit semis last week. They analyze a proposed US ban on Chinese optical transceivers that threatens to cut off 50% of the global supply, the market's reaction to AMD's surprise $800M CapEx spend despite strong earnings, and how a new company called Volta Infrastructure landed a $10B compute deal with Anthropic by pioneering a new financial model for AI.

Key Takeaways:

- The proposed ban on Chinese optical transceivers is based on a flawed security rationale—the components are simple signal converters, not a meaningful vector for malware.

- A ban would be self-defeating, as it would cut off the ~50% of global transceiver supply assembled in China, creating the very data center disruption it claims to prevent.

- AMD's successful pivot to a data-center-first company (58% of revenue) is being scrutinized for its high CapEx—$800M vs an expected $200-300M—revealing the hidden costs of securing supply.

- Nvidia's use of on-chip SRAM for inference's decode phase highlights a strategic gap for AMD, which lacks a compelling SRAM-based solution to compete on disaggregated workloads.

- Volta Infrastructure's $10B deal with Anthropic is an innovation in finance, not tech; it applies low-cost 'infrastructure debt' to AI compute by framing clusters as predictable 'token factories'.

- The Volta deal was necessary because all existing CSP capacity is allocated; it acts as a 'clean balance sheet' SPV to secure low-cost debt for Anthropic's new, dedicated Nvidia capacity.

Chapters:
0:00 Intro: News Take Format
0:40 The China Optical Ban
4:02 A Flawed Security Rationale
11:30 Market & Supply Chain Impact
15:07 Investment Paralysis
15:52 AMD's Earnings Scrutiny
24:46 AMD's Missing SRAM Strategy
25:33 Volta's $10B Anthropic Deal
28:55 Volta's 'Toll Road' Model
32:19 Why the Volta Deal Was Necessary
33:38 The 'One Customer' Counterpoint
34:27 Wrap: Tech & Financial Innovation

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Transcript

SPEAKER_01 0:00

And hello everyone. I'm Austin Lyons from Chipstrat. With me is Vic Shaker from Vic's Newsletters. And we are bringing you a news flash, uh news take from Semi-Doped. So this is a little bit different than our regularly scheduled programming. Um Vic and I decided that every couple weeks there's like just some really interesting stuff that we're like really itching to talk about. And it doesn't always align with our schedule of when we are normally going to record. Um, and so we just thought it'd be fun to have these shorter kind of news take episodes that we bring to you. So um, Vic, what is it that made you want to jump on and talk this week? What are we talking about today?

SPEAKER_00 0:40

It's this whole Reuters uh news article about how uh the Trump administration is uh proposing to, you know, put a ban on Chinese optical transceivers. And uh it stirred up quite the panic, you know, in the markets because you really can't build out an AI data center without optical transceivers. And whether people realize it or not, like a bulk of this entire optical component assembly stuff, including the pluggable modules, are actually assembled in China. So it was like quite a shock to everybody, and everybody was scrambling to make out, you know, what's going on here. And at that time, I was like, I think we should just cover this at least, because it's an interesting thing to talk about because it's just like what's going on. What if we are cut off from optical transceivers tomorrow? You know, what would happen or why you we think it will actually happen or not happen? So that's why I was like, let's do a news flash today.

SPEAKER_01 1:42

Yes, totally, which is good. So let's so let's get into it. You know, I I too, I woke up and I read this, and my initial reaction was you can't just cut these off from China immediately because you're not going to backfill that supply immediately from the United States, right? So there would be, if you shut it down, there would be a period of time where it's just like, all right, we just have less optical transceivers at the point in time when we're trying to build out data centers, you know, at scales like we never have before. Um but but yeah, walk me through your line of thinking when you read it.

SPEAKER_00 2:21

Uh essentially, the news that was reported on August 4th uh says the Trump administration is drafting a ban on US imports of new models of Chinese data center components as it seeks to protect the infrastructure that undergirds the AI boom. Okay, they got some part of it right. Basically, it really is an important part of the AI boom, right? Uh because you can't without optical interconnects, you can't do any scale out or like scale across or even like hook up uh to the data center. You can't even do inference or training or whatever. Like it it's a big it's a big part of the AI infrastructure, so that's pretty good. Um so the specific ban actually comes down to Chinese optical transceivers, uh, which we've spoken on this podcast, it just converts light to electricity and back again uh because light travels much better distances uh at a much faster rate. Uh so you know compared to electrical transceivers, optical transceivers can connect longer distances. So we've done a whole episode on this uh the basics of like transceivers and networking and all that, uh, which you should check out uh if if you're uh wanting to get more into this. So, but the whole thing was that um this was the dumbest thing I saw in the article. I'm gonna read this out, okay? Like after this, I'm gonna ask you what do you think about this because it's like really dumb. It says the move not previously reported uh aims to prevent Chinese firms from stealing data, installing malware, or disrupting service at US data centers, which house the chips to train and run AI models. Like, why do you think that you know banning the shipment of optical transceivers will prevent the stealing of data and installing of malware? I mean, that literally has nothing to do with it.

SPEAKER_01 4:16

Right, right. I too was struggling to understand this and I kind of went down a little bit of a research rabbit hole to figure out like, is this even possible? Like just so the question is if a Chinese company assembles an optical transceiver, is that actually a security risk? And so by the way, I kind of emphasize assembles because at the end of the day, um what do these optical transceivers have in them? A lot of times it's a Broadcom or Marvell DSP. It's like read timers, drivers, TIAs, all these various components, a lot of which actually will come from American companies, not necessarily Chinese companies. Um, so you know, these particular transceiver companies, in Olight, for example, or e OptoLink or these other ones, um, a lot of it is is the assembly and the final kind of cabling and putting everything together. And so the question is like, well, where are they gonna put malware? Like, what are we talking about here if if they're sourcing a lot of the components? And the one thing I could find is that there's often like a little MCU, like microcontroller that has some firmware on it. And that firmware can be written to by the vendor. Um, but as far as I could tell, and I would, of course, I would love some transceiver person in the industry to tell us more about that. I did find um some links. It was like an OIP, optical interconnect group or something that that had these slides. It was in our semi-dope daily. I should have pulled it up this morning, but it was like, okay, it's it is very it's a normal thing for optical transceiver companies to have an MCU that has firmware on it and it can be programmed. Um, and and sometimes they make it so you you couldn't just go in and read it back out yourself to be like, what did they put on here? You know, like I want to audit this. Um, but it's not clear to me that after it gets shipped, they would have any way to get in and upgrade that firmware. So it's not like I could sell you my transceiver and then remotely connect from China and then put all this malware on it and you know, do something.

SPEAKER_00 6:30

These pluggable transceivers don't have uh too many components, honestly. They have an amplifier uh on the transmit side and they have a you know an amplifier on the receive side, and then they have some conversion circuits, and that's about it. I mean, then you've got some optical connections like you know, uh fiber attached units or whatever if you want to connect to the optical engine. Uh that's it. I mean, what else is here? Like in an optical engine, there's nothing, and then there's like an optic fiber that plugs into it. There's no there's no malware or stealing data or whatever's going on here. Oh, you know what's ironic about this is that they want to make this whole uh ban to prevent the disruption of service at US data centers. Which the ban would do that. Exactly. The ban would exactly do what you're trying to avoid. Yeah, totally, totally.

SPEAKER_01 7:21

So you do wonder, of course, with things like this, is it you you kind of wonder, is it the government saying, you know, we want to continue to put pressure on China, and here's yet one other angle. It's not, you know, NVIDIA GPUs, it's somewhere else in the supply chain. Can we put the squeeze on the regardless of it's technically sound or not? And in fact, it's um a technic it's kind of a technically complicated area. So if we just tell people, hey, optical transceivers from China are bad, they could have malware. Maybe most people would just believe it at face value. So you wonder how much it actually has to even be true.

SPEAKER_00 8:02

Yeah, yeah.

SPEAKER_01 8:03

I don't know. I'm not in Washington, D.C.

SPEAKER_00 8:05

Oh, speaking of Washington, D.C., yes, I'm glad you said Washington, D.C., because read this next. Transceivers definitely pose a risk, said this person who's an AI policy expert at Washington, D.C. As data center build-out scales up, you want to make sure the data center supply chain is secure from the get-go. Like, you know, again, uh, it's there's there's nothing about security in this thing. Like these components uh have nothing in them that you can like hack into or like install a virus or something. You know the best analogy I have for this? It's like saying if you hook up this USB cable to your computer, you're gonna get a virus. Like it's just a USB cable. Like, why would I get a virus? Exactly. You won't, you know.

SPEAKER_01 8:52

Oh, right. Yeah, data just transmits on it. Yeah. I did find, yeah, I did find that's okay, it's OIF, Optical Internetworking Forum, and they had this webinar, and there are some slides around like a little MCU on these transceivers for some little bit of firmware stuff. Um so there is a little bit of trusting the module vendor, but it but again, and I'll I'll we can put a link in the show notes, but again, it's very unclear that it is an attack vector.

SPEAKER_00 9:25

Yeah, yeah. Actually, there is there are some management services that uh that actually go on uh inside um, you know, so that's there, yes. There's some there are some functions that do this kind of stuff. But one other thing is that the moment uh the the biggest company that was hit in China for this is uh Zhangji Inolite, right? They uh seemingly contribute to about 35 34 percent of uh the global sales of transceivers, um, which some analysts actually revised up from what this Reuters article calls to be 27%. So uh down here it says Inolite has a leading 27% uh share of the global transceiver market, uh, but some people said it's actually a little bit more than that. And there are others too uh in the Chinese supply chain who make these things, and if you add them all up, they it constitute about 50% of the global optical transceiver market. That is a significant amount of um supply to just like ban because you can't get these things anywhere else. And I have to explain what that means because the shares of like Lomentum and Coherent and all these things and applied optoelectronics goes up uh with when when this news came out. But none of these companies, other than maybe applied optoelectronics to some small fraction, uh actually assembles transceivers. Yeah, I mean lumentum and coherent are still going to uh make lasers, but they kind of make the hard-to-make high-end content of an optical transceiver, like the 200 gig EMLs uh and ultra high power lasers that aren't really like accessible to too many like Chinese modules uh makers or whatever. So, what the Chinese module makers actually do is like they they work on this very low margin stuff, but it's a very essential portion of the market. And without them, this is you can't have optical interconnections in the data center, right? So it's I don't know what how to think about this, but ultimately if there is nobody to package and uh these optical transceivers into a pluggable module, then I would imagine that lumentum and coherent would be uh upset, like affected by the situation because the sales would go down. So you won't actually want people shipping pluggable modules, right? So I'm not sure why Lumentum and Coherent went up as soon as Chinese, you know, ban was supposed to show up.

SPEAKER_01 12:01

Yes, okay, so I had that take as well, which is like, okay, look, if there's a fixed supply and then we take the Chinese supply off the table, that doesn't mean that immediately Lumentum and Coherent are gonna sell more. They still have a fixed supply, right? And so it's like okay, maybe like Fabronet and these other contract manufacturers could try to pull some supply online, and then maybe that would be allocated to the Lumentum's coherence and whoever, but none of that happens immediately. So actually, just immediately, the only thing that happens is that like now we've traded uh you know, security concerns for actually building capacity, right? And so this is actually very European in some sense, which is just like, oh no, we're scared about something. Let's just put a bunch of regulations and slow down the building of it whatsoever, you know, like because there could be a tiny uh attack vector that they can often say it doesn't really seem possible. Let's just stop building data centers because we just cut off supply to all the interconnect cables.

SPEAKER_00 13:06

Yeah. And there's another uh complicated angle to this because uh TerraHop, which is actually the non-China arm of Inolite, is actually uh, you know, is a is a subsidiary of uh of the Chinese company Inolite, but they are entirely operated out of Singapore, and they don't have anything to do with China. Like none of the parts come from China, none of the assembly happens in China, everything happens in like Southeast Asia. Uh but now what would you do with those? Like, how would you deal with Terahop? Would you ban them? Would you not ban them? It's very gray area. So so many of these things, and they also said that this this ban only applies to new modules. But what does new mean? Like these things have revisions all the time. Like, what is new? Like a new slightly different revision v2 to v3 makes it a new product? Like changing a slight orientation of a part on a module become makes it a new product. Like, what is it? So I don't think any anybody knows. But do you actually think that this is actually going to come into play and actually last?

SPEAKER_01 14:16

So I don't I don't think so. I don't see I think enough people, I mean, come on, if you're Broadcom Marvell, Coherent Lumentum, and everyone in the supply chain. Oh, and by the way, if you're Microsoft Azure or OCI or anyone who's building out data centers, like everyone's gonna literally say, like, hold the phone, this is not right. This is not it. So I I don't think, yeah, I don't think this is gonna happen.

SPEAKER_00 14:43

And I don't think anybody is going to, any US maker is going to like I don't know, like Fabrinet or uh uh Asanmina and you know, all these companies are going to go off and immediately say, uh, you know, let's start building capacity. Yeah, this is our business model, because you know, the before you know it, like in a few months, if this reverses and then all that capacity is gone to waste, nobody's gonna do anything.

SPEAKER_01 15:06

Correct. Yes. No, you make a very good point, which is like no one can proactively take action on this because it would be manufacturers who'd have to try to ramp up supply, and that is a very expensive and kind of one-way door, right? Uh you you you buy, you have shells, you build, you buy tools, you stand up a a supply, uh like a fab line, and then all of a sudden the government decides, never mind, we're not gonna do this. And you're like, oh well, now we have all this excess capacity.

SPEAKER_00 15:40

Yep.

SPEAKER_01 15:41

Totally.

SPEAKER_00 15:42

Awesome. I think we've hit on that topic uh pretty nicely. Uh I don't have anything else to say about it, do you? Let's nope. Okay, let's we have to see how it rolls out. What's your uh take on the whole AMD earnings scenario? Like uh did they seem to have posted some really good earnings, uh but uh the stock fell and people are like questioning something. What's going on there?

SPEAKER_01 16:08

Yeah, yeah, yeah. So okay, AMD, they had good earnings. Um, you know, they are record revenue of 11.5 billion, up 50% year over year, 13% quarter over quarter. Their data center segment, 6.7 billion, which is up 107% year over year, and is um importantly, is now 58% of their total revenue. So they have shifted from a sort of consumer uh client PC client graphics company to a data center company, which you would hope that they would do that, right? So they're actively executing it on that. Uh Epic CPU demand is good. Um Helios has a good reception and is shipping end of Q3, Q4, Q1, right? So everything at a high level looks good. Now, the stock dropped after hours um after their earnings call. And uh so then there was a lot of like, oh no, you know, people must not what what don't investors like about AMD's earnings? And and there was a couple things that people were poking on. Um one, it was okay, well, how much growth is actually happening with GPUs? Um, obviously CPU agency CPU demand for Epic is very strong. Uh Helios is promising, but it hasn't really shipped yet. And and they, you know, there were some comments about like uh acceleration and like Stacy Rascon. If you listen to the call, he was poking on it, saying, like, oh, well, is it actually like not accelerating as much as possible? Or you you know, because there's like quarter over quarter acceleration versus just like half over half, and and you know, whatever. There was some surprises about um spending 800 million in CapEx instead of the expected maybe two or 300 million. And and you know, there are some legitimate on the one hand, um, you know, some of that spend might be into their own compute infrastructure, um, but there's some concern that some of that is actually needed to, for example, get supply for substrates and um help OEMs and ODMs like get to the finish line with these rack scale helios and stuff like that. And so, like the the nuanced argument there is that it's not so simple to be fabless anymore. Like you used to be a fabulous company and not have to take on a lot of that, have that skin in the game for like getting allocation to certain things. But now that it's hard to get substrates, it's hard to get memory or anything like that, like that. The point is like, hey, wait a minute, AMD is supposed to be a fabulous company, but they're having to, you know, put their own money in to get allocation. But again, that doesn't necessarily seem say that uh AMD is an unhealthy business. Um, it that's just like a dynamic of the time. So I I personally, the the stock had run up ahead of the earnings and then it fell off a little bit, but I I wasn't necessarily concerned about anything. I think if I was trying to push on AMD and take like a more skeptical, bearish angle and and try to really push on them. The the line of thinking that I came up with is after re-listening to the earnings call, there was definitely talk about demand outpacing supply. And Lisa had said something like it was unforecastable. It was just like, wow, this demand is crazy. So then I would ask, okay, what demand are we talking about? So the answer there is CPUs, right? Like agentic AI came on stronger than we expected, and we need to sell uh they said they had double-digit growth on CPU unit volume. So this is epic server CPUs and um epic ASPs. And so that's why they they were very strong, is because they sold a lot more CPUs and a lot higher price than they expected. But also they they're leaving money on the table because they didn't have enough supply because they didn't see it coming on so strong. Okay, good, good, that's great. AMD is a very strong server CPU business. But then I would say, okay, but what about GPU demand? Because we're in the GPU era and that's where the money is made. Is does your GPU demand outstrip your supply? And so the answer they would probably give is like, yes, demand is very strong, and Helios is a great product. You say, okay, uh, but like, does demand outpace supply? And you know, the answer is like, well, right now, of course it does, because we haven't shipped any, right? So it's like, okay, we're shipping a little bit at the end of Q3. There'll be a step up in Q4 and a step up in Q1. And we've seen some nice conversation uh and customer uh partnerships around Helios where, you know, OpenAI, Meta, lots of folks have um stepped up anthropic and said they're gonna deploy Helios. And so, you know, you you would say, okay, um great, there's strong demand for Helios and you're ramping supply. But the question is, how many quarters ahead do you think that the demand for Helios will still outstrip supply? When Helios is at full ramp, maybe it's like Q2, will there still be more new demand for it than supply? Um, and so you know, I think that the answer would probably still be yes, especially because AMD took a particular, they made a they made a particular design bet as they did it with the 300 series, which is let's have more memor HBM memory capacity than the competition. And so AMD, I think, would say, well, yes, there will be certain workloads where we'll still have a ton of demand because it's there you get better TCO if, for example, you can run inference of this particular model on eight. AMD GPUs versus 16 NVIDIA, right? Um but here's where it gets really interesting. Okay, so you're betting on HBM being the differentiator here, but HBM, um the price of HBM has gone crazy, right? So it's like really expensive for HBM, but it's worth it for certain workloads. But what about workloads where it's not worth it? So for example, pre-fill and decode. Pre-fill is very compute-bound, compute heavy. You don't actually need as much HBM. Um decode very memory bound. So that's where the HBM shines. So then the next logical question is like, okay, but you kind of only have one SKU. So it and you decided to put a ton of memory on it. So is it going to be really expensive to use Helios M MI455 chips for a pre-fill? And so on the call, actually, um there was some interesting conversation where Lisa said, um, hey, we are flexible, we're a chiplet-based company. We have the flexibility to change the compute to memory ratios. And so for certain workloads, if our customers, if the TCO of the way we've designed the chip doesn't work, we could actually reduce the HBM footprint for them. Um okay, okay, this is theirs is promising. Um, so that I think what that leads to is I wouldn't, my prediction would be I won't be surprised if AMD comes out and says, we're gonna start to have more of a portfolio of offerings in the uh instinct family. Obviously, they already have these other ones that for like that are more focused on enterprises and air cooled and stuff like that. But even with their high-end MI450 series, I wouldn't be surprised if they start to say, like, we've got some offerings that don't have as much HBM if you want to use it for pre-fill, and you can use our current ones for decode and maybe end up moving toward a portfolio of offerings, which is aligns with the direction the industry is heading anyway. Um, I think the memory costs are really just putting pressure on AMT's design decision and sort of pulling them in this direction.

SPEAKER_00 24:17

I mean, NVIDIA had this whole CPX thing for pre-fill, uh, but then we never heard of it again. So maybe disaggregating prefill and decode into separate hardware SKUs is wasn't the greatest idea. Well, okay, so that's it.

SPEAKER_01 24:33

That is a great, a great question, a great pushback. The solution was instead of to say uh let's have GPUs, some with a lot of HBMs, some without, then they actually, of course, came in and did the whole SRAM thing and said, wait a minute, what if we use the SRAM for decode and then we keep our HBM for the prefill? And so that would also continue to um point out that AMD doesn't really have an SRAM offering, although they did just launch or make that announcement at Advancing AI about partnering with Cerebrus to sort of fill yep, yep, to fill that out. But again, I think we'll maybe we'll see more from AMD here on flushing out what is their strategy, where does SRAM come in? Where does GPUs with less HBM come in? So I think there's probably gonna be more coming from AMD. That that's my takeaway.

SPEAKER_00 25:23

Okay, yeah, it's an interesting, interesting approach. It's a good explanation, actually. I don't have anything to add to it, but we'll see how it uh rolls out from here. Um because I wanted to uh go on to the next piece of uh interesting news, which is this company called uh Volta Infrastructure. Have you heard of this company?

SPEAKER_01 25:43

I didn't until you texted me, to be honest.

SPEAKER_00 25:46

Okay. So let me let me uh run through what this thing does. This is very this is quite amazing to me, okay? Uh because there is this company called Volta Infrastructure, which is a London-based company. Not to be mistaken for another company of the same name, which is Singapore-based, and also does something very similar. I was totally confused when I saw the website. Um, this company was very interesting only because this company is uh has been around only for about six or seven months. Okay. This company is, let's say, as old as our podcast as we record this right now because it started it. Okay. And uh they seemingly have gotten a $10 billion uh deal with some unknown, unnamed AI lab or something, uh, which later I think Bloomberg, was it, uh, yeah, reported that it's actually Anthropic, who has put in a $10 billion computing deal with this new cloud startup that's been around only six or seven months. So you've got this like big player coming in and uh just like putting in a compute deal that's worth you know nine figures, and you've got this company that becomes instantly a multi-billion dollar valuation company. So I was like, wait, what does this company even do? That like, how can they get like a $10 billion deal in compute in like six months? Why do what can I learn from this for semi-dope podcast, right?

SPEAKER_01 27:13

Yes, yes. My original thought was like, oh man, they're the same age as semidope. Dude, we picked the wrong industry podcasting. You know, why can't we start a compute?

SPEAKER_00 27:23

Start a new cloud. Yeah. Okay. Let me explain the the idea of this. Okay, the fundamental idea behind this company um is that they treat it like it's infrastructure. And this, you know, they treat this as inf you know, basically institutional grade infrastructure build-out. And I had no idea what that meant. Okay. So I was like, okay, let me dig into this a little bit more. And it's interesting because whenever you borrow money to build infrastructure, which can be like roads or uh you know something that you know you can just get basically money out of on a regular uh revenue basis, right? Just let's use the example of roads, right? Infrastructure debt to build out roads is very different from what you would borrow to do something like a VC or like a corporate uh financing deal. And so the whole idea is that you treat this asset, whether it's roads or compute, as a contracted but predictable cash generator. So it generates cash. Like a toll road collects tolls and it's going to continue to do so for decades. Like a power plant sells you know electricity for a very long time, often 15, 20 years. So the bet is that AI is not like a data center. You know, AI is not, you know, we call it data centers, but it's really not that because uh there's a lot of sharing and like a lot of virtualization, you get part of the compute in a data center, typically in the old days. Compute is very different. Like it is a token factory, it's an AI factory. Think of it as infrastructure and that is factory. So whenever you say that I can produce revenue like collecting tolls for a long period of time, institutional lenders, right, they tend to give this loan to you at lower interest rates, which means that they are uh not betting on growth or some fixed outcome, but they know that you're going to start generating revenue by collecting tolls immediately. So the cost of the capital, right, because you are getting this at a lower interest rate, means that the person building out with them gets compute at a lower price somehow, right? So that's where this whole thing is built out. So this is their whole idea behind building data centers uh from capital to tokens uh for you know companies like perhaps Anthropic, who's coming through the door. Sure, totally.

SPEAKER_01 29:57

And I know we're short on time, so I'll keep my take short. Uh so first of all, I'll say that um Jensen would be very happy to hear you talk about token factories and financing it like a utility, and that's how he thinks about it too. So uh, you know, congrats on uh thinking the same way as Jensen. So, okay, there's one other way that I would approach this. When I started to think about this, I thought, like, okay, let's say it's Anthropic. Um, Anthropic says, oh wow, uh, we need a bunch of NVIDIA GPUs. And let me remind people that Anthropic traditionally used training, and then they also said, we need more compute, and so they started using TPUs. And like nine months ago, there's an announcement where Microsoft, NVIDIA, and Anthropic said, like, hey, there's this three-way partnership, and Anthropic's going to commit to 30 billion of Azure compute plus up to one gigawatt additional initially on Grace Blackwell and Vera Rubin. And in NVIDIA was investing, Microsoft investing. Okay. And so it was like, oh wow, this is actually upside TAM for NVIDIA, which I think people forgot was one of the two biggest model lab companies wasn't actually really using NVIDIA yet. Um, so now let's say you're anthropic and you're like, great, we want even more NVIDIA. How do you find it? You, you, every neo large neo cloud and large CSP who has NVIDIA compute has already has customers that it's allocated to. So where are you gonna find it? Okay, well, you just maybe Jensen says, hey, I'll allocate you some. And then you say, okay, well, I have to find power. Okay, so where do you get the power and and someone to operate it? Well, basically, in this case, it um this Volta is the balance sheet company that just started, but the operator is actually this um crypto miner, like BitDeer and or something like that. And so there's an exit, yeah, existing crypto miner that has experience operating data centers, but they're not gonna be able to take on any of the balance sheet. They're not gonna get that low cost of capital financing. And so I think, you know, this is also just a clever way to say, let's start a new company, clean balance sheet, and they're going to receive the money and they're gonna be sort of like the parent, um, but actually they will pay BitDear for power and operations. And NVIDIA will help make sure that some new GPUs get built and allocated and and set up there. And then Anthropic can it to me, it feels like the fastest way for Anthropic to spin up more uh NVIDIA GPUs was essentially needing a clean balance sheet to borrow against someone to come in and play that role. But but it is obviously, yeah, it's very creative, create financially creative.

SPEAKER_00 32:41

It's amazing. Yeah, it's financially creative. And I'm like, wait, what's going on? Like people just drop like 10 billion like just like that nowadays into a company of Nick never even heard of uh or but it's it's fascinating. It we live in fascinating times. It's uh it's great. Like let me admit to work for a long time for that much, kind of that much money, you know.

SPEAKER_01 33:04

I know. But now think about if you're Volta, you're like, yeah, we've got one customer and we've got $10 billion. But on the other hand, it's like, dudes, you guys have one customer. Like, what's the long-term game plan? And I'm sure the game plan is like just keep making that customer happy as long as possible, and then maybe eventually win some other customers. But then that's essentially every other neo cloud in the world. It's like we've got one big customer and we're hoping to differentiate.

SPEAKER_00 33:29

That's true. So yeah, like basically two things, right? Like most startups can't even say, yay, one customer, right? Right, right. The one customer is amazing. Uh so the second thing is that if the customer is like anthropic, there's a big customer to nail like on like level one, and you've like already nailed anthropic, everyone is gonna follow suit, right? The pack of cards and the dominoes will fall, everybody's gonna throw compute money everywhere, and CapEx is going to continue going to the trillions. Uh yeah, I don't know when this uh this is this is very interesting, so I thought we should cover it on the uh podcast. Anyway, enough of that. Let's see what happens. Uh it's nice, nice to keep a tab on these kinds of creative financing deals. You know, we are not really finance guys, but I love to like understand the financial creativity behind how some of these things work. Uh, or maybe it's just new to me, which either way I have fun. Absolutely.

SPEAKER_01 34:27

It is going to be it is the story that's woven through the period of history we live in right now, which is very interesting technical um innovations as we move to uh data center scale computers, and then very interesting financial innovations to finance it all. And so with that, we'll call this episode a wrap. Thanks for listening, guys.