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Chamath: If data center scarcity pushes compute prices up 2x to 3x, the pricing of the SpaceX and Anthropic compute deal will be decided by a spreadsheet, whatever the relationship between the two companies.
If spot prices for compute spike far enough, a contract with a 90 day exit should be repriced, because keeping the old rate loses money.
if the market price for compute rises far above what Anthropic pays under its contract, SpaceX would earn less on every GPU hour it keeps selling at the old rate, so using the 90 day exit to reprice becomes the only rational business move.
"This has nothing to do with their working relationship or whether Anthropic is a good or bad company or SpaceX is a good or bad company. This is nothing to do with that. This is a spreadsheet and the spreadsheet will dictate the answer. And the question is if spot spikes you are economically forced to do this beyond a certain threshold.”
“I’m not saying throw it up to spot. What I’m saying is when spot moves sufficiently, even a long-term offtake moves so much that existing contracts are negative EV. And so you just got to move existing contracts to positive EV territory.
And if you can get out in 90 days and reprice something into positive EV territory, you should. So my point is more that beyond a certain point if a bunch of data centers get slowed down, a bunch of constraint happens, there’s going to be a lot less capacity than people think. The dollar cost per megawatt per month is going to go through the roof. The dollar cost of a GPU hour is going to go through the roof. And the people that will be willing to pay the premium are going to be the ginormous companies with huge balance sheets. And so you could just sell it to Google or Meta if you wanted to. You don’t have to sell it to OpenAI."
---- Full video on "All-In Podcast" YouTube channel, (link in comment)
Chamath says that if data center supply tightens, SpaceX could end its compute deal with Anthropic on 90 days notice and bring it back at 2x to 3x the price, and Anthropic would have to take it.
"So, whatever revenue you see on SpaceX's balance sheet from Ant could two to 3x and ANT would have no choice except to immediately capitulate and take the higher price. It would also show all of the other hyperscalers that they are very far away from having economic yield that is optimized. And so then it forces them to consider should I be giving it to myself?
Should I be selling it to the other people? It then forces the Neoclouds to take all of this money that they've raised, whether it's debt or equity, and say, "I have two choices, which is to buy as much compute today as I can at whatever price it's available because the other path is assured destruction and bankruptcy for me because I am just out of the game."
And so, what do they do? They will take the last gasp and do whatever they have.
So all the game theory comes down to this one deal and whether Elon decides to rip it because if he rips it, watch out.
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Full video on "All-In Podcast" YouTube channel, (link in comment)
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Chamath: A data center freeze after the midterm election helps the hyperscalers (Amazon, Meta, Microsoft, Google and SpaceX) and hurts everyone who rents compute.
The hyperscalers already have built data centers and power, so a freeze makes what they hold scarcer and worth more.
Neoclouds and labs like OpenAI and Anthropic need much more compute every year to grow, and a freeze cuts off the new supply they were counting on.
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Full video on "All-In Podcast" YouTube channel, (link in comment)
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