MONITOR AI CAPEX

“They're recovering from the trauma that they experienced living in captivity. And for them to open up and trust you while you are there with them, helping them work through it, it's indescribable.”

“The dominant political story of the year has been the 270-day-long speakership of Representative Kevin McCarthy, whose slim majority in the House of Representatives has enabled a far-right rebellion to exert more weight over the lower chamber. The battle between the rebellious Freedom Caucus and McCarthy has been at the heart of an averted debt ceiling crisis and the annual budget debate nearly devolving into a government shutdown, all culminating in the removal of McCarthy on October 3.”

“2023 also saw the roots of a global banking crisis arise out of four American regional banks, the two largest being Silicon Valley Bank and First Republic Bank. 2021's inflation surge moderated in 2023, while the Federal Reserve continued to raise its interest rates in the first half of the year.”

“The rise of artificial intelligence and large language models dominated not only the economy but has also been at the root of a Hollywood double strike conducted by Writers Guild of America and a SAG APTRA strike. These were part of a larger phenomenon of labor strikes across the country, in which such large diverse groups, such as Teamsters and Auto Workers won new contracts.”

“Additionally, the latter half of the year saw many large mergers and acquisitions, some of the largest announcements being in oil and gas with ExxonMobil's purchase of Pioneer Natural Resources for nearly $60 billion and Chevron's acquisition of Hess Corporation for $50 billion, both in October and pending regulatory approval prior to closure.”

“They're recovering from the trauma that they experienced living in captivity. And for them to open up and trust you while you are there with them, helping them work through it, it's indescribable.”

“The dominant political story of the year has been the 270-day-long speakership of Representative Kevin McCarthy, whose slim majority in the House of Representatives has enabled a far-right rebellion to exert more weight over the lower chamber. The battle between the rebellious Freedom Caucus and McCarthy has been at the heart of an averted debt ceiling crisis and the annual budget debate nearly devolving into a government shutdown, all culminating in the removal of McCarthy on October 3.”

“2023 also saw the roots of a global banking crisis arise out of four American regional banks, the two largest being Silicon Valley Bank and First Republic Bank. 2021's inflation surge moderated in 2023, while the Federal Reserve continued to raise its interest rates in the first half of the year.”

“The rise of artificial intelligence and large language models dominated not only the economy but has also been at the root of a Hollywood double strike conducted by Writers Guild of America and a SAG APTRA strike. These were part of a larger phenomenon of labor strikes across the country, in which such large diverse groups, such as Teamsters and Auto Workers won new contracts.”

“Additionally, the latter half of the year saw many large mergers and acquisitions, some of the largest announcements being in oil and gas with ExxonMobil's purchase of Pioneer Natural Resources for nearly $60 billion and Chevron's acquisition of Hess Corporation for $50 billion, both in October and pending regulatory approval prior to closure.”

“Ticker XLI is the State Street Industrial Select Sector SPDR ETF... Even if the economy is starting to turn, you're not really seeing signs of a breakdown in industrials and certainly not seeing a sign of a breakdown in this ETF. A lot of what has happened in the market this week has been centered around the narrative of AI, AI spending, and really the lack of monetization across the board and hasn't really spilled over into other sectors. Unless you're overweight a ridiculous amount relative to what the market weight is of industrials, I don't see any reason why you would want to fully exit this industrials ETF.”

“We've all seen how tech earnings calls have really highlighted a new risk. There isn't enough electricity to power the new data centers. We'll talk about the utility super cycle as power companies raise rates to build this new capacity. We'll also touch on a story I saw today about KPMG pressing its auditors to cut costs, or rather to cut the price they charge KPMG due to AI cost savings. What does that mean for the audit industry and really industry as a whole?”

“What really drove the market today? Well, it was the feeling that there was a bit of a bottoming in software. It was a focus as groups attempted to break seven straight declines. Bit of a pick up in commentary. We saw a lot of discussion about very oversold conditions and some pushback against some of the more dire predictions revolving around that AI competition that was part and parcel for why the market was doing what it was doing. In addition, you had elevated hyperscaler capex, still a positive for the broader AI trade.”

“Typically, people want to invest in preferred stocks because they have a bit of an income focus. They typically pay higher fixed dividends than common stocks and often have some pretty attractive yields, anywhere from 5% to 8%, and so that makes them pretty attractive for these steady cash flow seekers. But that also changes where they are as well with respect to their position in the capital stack. They sit above common equity, meaning if a company goes bankrupt, you would get some claim on assets before common stock shareholders do, but they are below bonds as well.”

“Micron Technology has had quite, quite a positive performance recently. It is a leading semiconductor memory and storage company, so they make DRAM, NAND, Flash, and high bandwidth memory. It's one of the few major global suppliers in an industry that has a lot of high barriers to entry, not just because of input costs, but also because of the required technological understanding and ability to develop these very complex and small products. This HBM, it's high bandwidth memory, right? This is really what's been driving it here.”

“Ticker XLI is the State Street Industrial Select Sector SPDR ETF... Even if the economy is starting to turn, you're not really seeing signs of a breakdown in industrials and certainly not seeing a sign of a breakdown in this ETF. A lot of what has happened in the market this week has been centered around the narrative of AI, AI spending, and really the lack of monetization across the board and hasn't really spilled over into other sectors. Unless you're overweight a ridiculous amount relative to what the market weight is of industrials, I don't see any reason why you would want to fully exit this industrials ETF.”

“We've all seen how tech earnings calls have really highlighted a new risk. There isn't enough electricity to power the new data centers. We'll talk about the utility super cycle as power companies raise rates to build this new capacity. We'll also touch on a story I saw today about KPMG pressing its auditors to cut costs, or rather to cut the price they charge KPMG due to AI cost savings. What does that mean for the audit industry and really industry as a whole?”

“What really drove the market today? Well, it was the feeling that there was a bit of a bottoming in software. It was a focus as groups attempted to break seven straight declines. Bit of a pick up in commentary. We saw a lot of discussion about very oversold conditions and some pushback against some of the more dire predictions revolving around that AI competition that was part and parcel for why the market was doing what it was doing. In addition, you had elevated hyperscaler capex, still a positive for the broader AI trade.”

“Typically, people want to invest in preferred stocks because they have a bit of an income focus. They typically pay higher fixed dividends than common stocks and often have some pretty attractive yields, anywhere from 5% to 8%, and so that makes them pretty attractive for these steady cash flow seekers. But that also changes where they are as well with respect to their position in the capital stack. They sit above common equity, meaning if a company goes bankrupt, you would get some claim on assets before common stock shareholders do, but they are below bonds as well.”

“Micron Technology has had quite, quite a positive performance recently. It is a leading semiconductor memory and storage company, so they make DRAM, NAND, Flash, and high bandwidth memory. It's one of the few major global suppliers in an industry that has a lot of high barriers to entry, not just because of input costs, but also because of the required technological understanding and ability to develop these very complex and small products. This HBM, it's high bandwidth memory, right? This is really what's been driving it here.”

“The biggest story is that there is a data leak at Anthropic, and it revealed a secret model called Claude Mythos. Anthropic's own internal documents describe it as a quote unquote step change in capabilities, and they're saying that it poses an unprecedented cybersecurity risk. This is coming from the safety company, so we're going to unpack all of that on the podcast today.”

“SoftBank's $40 billion OpenAI investment. So they're putting together this big round for OpenAI. I think this is obviously a massive number, but that's almost secondary to what it represents when industry is really headed in an interesting direction. I think for me, what it's showing is there is a barrier to entry for building these kind of top-line AI models, and this barrier to entry is very high.”

“The new detail is that the compute that they're basically turning off for SORA. So it was kind of very computationally intensive to run that video model. So they're shutting that down, and they're actually going to be giving that directly to robotics research. I think they looked at AI video generation, they looked at robotics, and basically as a business decision, they had to pick one and they picked robotics.”

“Apple is planning to open up Siri to third party AI services through the App Store in iOS 27. Basically what this means is that you could have Claude or Gemini or Grok or really any other AI model running your Siri for you, as long as the developer builds integration. You'd essentially be choosing your AI assistant the same way you choose your default browser on iPhones.”

“Melania Trump brought in the Figure 3 humanoid robot, and it was basically walking around on two feet. It was greeting guests. It was speaking in 11 different languages. Now, I think on the surface, you can really look at this like a PR moment for Figure 3, but I think the reason why it matters is it's a signal of how fast physical AI is moving.”

“It's actually a $25 billion round of cash is sort of up front... the rest is in kind. So it seems from looking at this... it's a bit like a procurement round.”

“The rest of the space is actually negative on using the product in terms of the unit economics. So the more you use the product, the more you lose the money.”

“The US plans include targeting all of Iran's civilian electric power generation plants, probably simultaneously. That's exactly the red line that Iran has previously said would cause it to retaliate by targeting desalination plants.”