I own assets & chill. Investor in grid enhancing technologies. Prototypes are easy, production is hard ⚡️🔋
Manhattan, NY
Joined May 2021
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JordanSolace retweeted
Thoughts around AI
1) Given AI is the largest technology revolution in history at roughly 3.5% of GPD (larger than electrification, highways & internet combined); there is overinvestment due to the potential rewards for the eventual winners.
2) But much like during the Internet buildout, which had several large drawdowns including in 1997 (Asian currency crisis) and 1998 (Russian bond default), and then ripped higher, the question is whether this is THE TOP.
3) AI had 3 separate investment waves: training, inference and now Agentic
a. Agentic demands 10-100x more tokens than inference and started with OpenClaw in January for the tech savvy followed by Muse in late September for the rest of us.
4) Currently, the market is repricing two things
a. Financing costs are higher in both debt & equity mkts
i. Debt- $CRWV unsecured debt trading at 15%
ii. Equity- expected timing for AI related IPOs like OpenAI, Anthropic delayed earlier this year while filed IPOs of Firmus, AirTrunk, NScale, SB Energy delayed/ pulled
iii. Meta 8K “timing is important to secure capital before competitors saturate various funding options… in an increasingly challenging environment for raising capital.”
b. AI native growth rates slowing
i. Anthropic revs 145% q/q in Q2 to 45% in Q3
ii. Openweight driving ASPs down ~50% since May
5) Datacenter moratoriums seem to be the only thing both parties agree on
a. This could get worse after the mid-terms with a less AI-friendly political climate
In summary, because of the advent of Agentic, I do not believe this is THE TOP. But having higher cash levels and being circumspect as the market reprices has been important. This has been my advice for the past several weeks.
Unfortunately, my belief that it was time to start putting money to work for at least a short-term rally this past week due to oversold conditions in areas like semiconductors has been early so far. The SOX was down 3.2% last week vs the S&P down 0.5% but time will tell.
$MSFT $AMZN $GOOGL earnings this upcoming wk
1) I think much like with $Meta earnings this past week where I previewed concerns, the stock reactions for the above three will have a lot more to do with their comments around future capex investments, expenses, cash flow and financing needs.
2) I worry whether a datacenter moratorium causes an issue with cloud growth guidance for the December quarter despite very strong growth in the September quarter. NextDC in Australia cut their rev guide by 22% for CY27 due to local community pushback and the stock was hit for 39% last week.
Microsoft seems committed to being cash flow positive and I see them being an ultimate winner in enterprise AI. 1. They provide a safe environment to run Co-Pilot AI applications given almost all S&P companies run M365 already. Co-Pilot seats were 30M+ in the June quarter up from 20M+ in March and 15M in December.
2. One potential risk is their high margin PC business being impacted by the large declines being caused by surging memory prices.
3. Azure expectations vs their guidance of 45% y/y for September vs 43% in June have also picked up given the share gains being seen by OpenAI against Anthropic recently in enterprise.
Google should see accelerating cloud growth & be an ultimate winner in consumer AI through their Android distribution on smartphones. My short-term concerns are the following:
1. Cash flow was negative for the first time since being a public company in the June quarter.
2. A slight miss in search revs in the June quarter raise concerns around AI Agents not looking at ads.
3. More aggressive analysts expect GCP growth of ~100% y/y for CQ3 y/y (but this includes TPU sales) up from 82% in CQ2 and 63% in Q1. This is more than double the growth rate expected for AWS and Azure so I worry that these datacenter moratoriums may on the margin impact the revenue growth possible at GCP.
4. Google needs to get out their consumer Agentic AI product. This should be a catalyst for their stock given it should integrate with the 14 Google products that have over 1B users each.
Amazon should benefit from physical AI improving efficiency in their heavy asset e-commerce business.
1. I also think their e-commerce demand is solid as shown by them hiring more seasonal workers (+20% y/y) for the first time since 2023.
2. But as the biggest public cloud vendor and the one with the most capex, could they be too big to escape the data-center moratorium impact on their December quarter? As an example, Amazon last week abandoned its plans for a large 4 building datacenter in Loudoun County Virginia which has been dubbed "Data Center Alley." AWS grew 28% in Q1 an accelerated to 37% in Q2 with no formal guidance but hopes for a slight acceleration in Q3.
3. However, Amazon reports on Thursday so their AWS expectations will be reset by whatever results are from Microsoft Azure and Google GCP on Wednesday.
Best of luck in the week ahead.
JordanSolace retweeted
The smaller the better
The more illiquid the better
The less institutionally owned the better
The less talked about the better
You make money by driving through the fears of other investors.
JordanSolace retweeted
AI is getting cheaper more quickly than any other transformative tech in history. At a given level of performance, cost has fallen ~47%/quarter since 2023.
That’s 4× faster than DNA sequencing, 6× faster than compute, 18× faster than lithium batteries, and (up to 1973) 54× faster than electricity.
JordanSolace retweeted
More on AI pacing:
Sarah Friar CFO of OpenAI yesterday on CNBC: “from where I sit today there is so much opportunity to drive growth that I am still highly focused on getting more compute to keep that flywheel going.”
Sachin Katti VP of Compute Strategy at OpenAI @sk7037 yesterday: “The way we will make sure frontier models are safe and aligned is by spending compute. So the counterintuitive point is that we’ll need even more compute to make sure future models are more safe and aligned.”
If you thought “pacing” was negative for AI infrastructure demand, think again. Almost as bullish as open-weight AI taking share but not quite.
JordanSolace retweeted
Wild 24 hours for AI and lots of different proposals have been made.
TLDR; the only *tangible* new fact is that OpenAI and Anthropic are going to have embedded 3rd party evaluators from unknown organizations with Dario floating METR as a possibility. Having 3rd party evaluators is smart as there is no Section 230 style liability shield for model outputs and showing a “duty of care” will be important in future litigation. Several internet companies might have gone bankrupt without Section 230 so limiting liability really matters.
There are minimal investment implications from this single new fact, but I do think that for anyone who wants a “smoother for longer” cycle then most constraints are good: wafers, watts, real rates and spreads. Excessive regulation is a different matter but I don’t think we are anywhere close to this even if the vector changed over the last 24 hours.
To summarize the events:
Dario made the most maximalist proposal of the weekend: embedded 3rd party evaluators, a national regulatory regime for models beyond a certain capability/ingredient threshold, a broad international regulatory pact between democracies, stricter limits on compute/distillation for China and then a different international regulatory regime that encompasses China. Before there is a national regulatory regime, he wants a Sherman act waiver so that Anthropic can safely coordinate with OpenAI and other frontier labs without antitrust fears. TBF, this latest proposal is much less maximalist than some of his prior proposals like “Policy on the AI Exponential,” where he advocated for an FAA for AI. I believe he is sincere in his beliefs. And despite all the protestations, all of this would also probably be good for his business over the long-term.
Sam agreed that embedded 3rd party evaluators were a good idea and stated they would implement them. Again, this is smart as should help limit future liability.
Elon said “Dario is right” and later specified that “Dario is right that there should be some oversight. Peer review of AI by competitors is the right way to start this off.” This would be a MPAA like self-regulatory structure for AI with regular calls between the labs plus a process where each new model is evaluated for safety by competitors for a 1-2 week period before being released. That is *wildly* different from Dario’s proposal and in-line with what David Sacks has been proposing. Elon also stated that nothing was going to slow down open-weight models.
Demis said that Dario’s essay was a “step in the right direction.” Dario also said that he was also open to Demis’ idea of a FINRA like self-regulatory structure as part of his proposal.
David Sacks had a thoughtful post where he said that Dario and Sam should pace unilaterally, called the antitrust waiver a cartel request and denied that METR was truly independent given their ties to Anthropic.
Sriram Krishnan, former White House AI advisor, noted that it would be important to have the 3rd party evaluators come from independent organizations that are not affiliated with any lab, which is basically an indirect statement about the relationship between METR and Anthropic which Sacks was explicit about.
Clem from Hugging Face said they were open to being a neutral 3rd party evaluator, which is interesting especially if Jensen was consulted before that post.
Alexander Wang from Meta noted that alignment would be an increasing focus going forward.
An executive order seems likely after all this and the language in this EO is going to be really important. It is possible to democratize and distribute AI broadly and safely without centralizing it in the hands of a few corporations who might each become more powerful than any single government.
I do not want a few humans in control of intelligence.
I want us all to have our own intelligences that reflect our own values and human variation in all of its richness.
Intelligence distribution over intelligence centralization FTW.
JordanSolace retweeted
President George W. Bush standing at Ground Zero in New York City following the September 11 Attacks. “I can hear you.”
JordanSolace retweeted
AI is still early innings.
The runway is very long and our portfolio is invested in the leading businesses which are benefiting from this secular trend.
JordanSolace retweeted
Elon Musk says the AI boom hits a WALL this year when we run out of power to run the chips.
He says the whole industry is about to learn a hard lesson in hardware.
Chip output is exploding, but electricity is nearly flat everywhere outside China.
So the two lines cross this year.
He says by the end of the year, we will be making more AI chips than we can actually turn on.
Millions of them pile up with nowhere to plug in.
In his words, the bottleneck for the next year is not chips, it is raw power.
Whoever can turn on the most chips fastest wins the race.
In the end, the AI race comes down to one thing:
Raw electricity.
— Elon Musk (.@elonmusk) on Dwarkesh Patel's (.@dwarkesh_sp) podcast
JordanSolace retweeted
If you can't handle being criticized for your convictions/positions, then you aren’t ready to make real money. Successful investing means doing independent research to form independent conviction so you can achieve uncommon outlier returns.
JordanSolace retweeted
The next big winner is an unknown or unloved company that is quietly executing where the market has low expectations.
JordanSolace retweeted
Power is THE binding constraint.
Data centers are being shut down, GPUs are sold out, models are being commoditized and spot rates are rising all leads to power being critical. Not fanciful plans for power, future forecasts of BTM or distributed batteries blah blah blah but energized power today.
This means the following hierarchy is developing from greatest to least value:
1. Hyperscaler
2. Neocloud
3. Model maker
Ideally, you are 1+3 (Google, SpaceX, Meta) where you own massive power today and have a leading set of models to keep API pricing from 3rd parties honest enough to benefit them vs the model maker. But even if you are just (1), you can still extract great economics from (3) because owning the power is the leverage.
This means (2) needs to scale up fast. If Neoclouds do not scale up fast and move up the value stack towards hyperscalers (solely measured by energized compute online today) they are going to leave a lot of revenue on the table which will complicate their long term financing plans.
Also, starting now, a neocloud’s real competitors will be well capitalized frontier model companies who will do sweetheart deals with (1) and/or will vertically integrate and try to become (1). You can see this in the fact pattern (Ant+AWS, OAI+Stargate).
Get your hands on power.
It’s the spice.
This chart is the single best argument for why neoclouds are about to print money (Save this).
SpaceX is generating between $30 million and $50 million in annualized revenue for every active megawatt of compute capacity, while pure play neoclouds like CoreWeave, Nebius and IREN sit in the $9.4 million to $10.4 million range.
Traditional colocation players like Digital Realty and Equinix trail even further behind at $3.5 million to $4.4 million per MW.
That gap matters because it shows exactly how much upside exists if neoclouds can push their revenue per MW closer to the top of that range and the mechanism that gets them there is simple: GPU rental pricing.
GPU lease rates have been rising fast which is the opposite of what most people assume about a commoditized rental market.
One year H100 contract rates jumped nearly 40%, from a low of $1.70 per GPU hour in October 2025 to $2.60 by now.
This is essentially a self reinforcing cycle where tightening supply drives price increases and those price increases push neoclouds to lock in more hardware which tightens supply again.
On demand pricing is even more extreme because every GPU model is essentially sold out on demand right now, with Blackwell generation B200 pricing running $4.99 to $18 per GPU hour depending on provider.
Several neoclouds have already started raising published rates rather than cutting them, with Lambda moving from $2.99 to as high as $4.29 an hour and Verda climbing from $2.29 to $3.25.
This pricing power flows directly into that revenue per MW chart, because every megawatt of power a neocloud controls becomes more valuable the higher GPU rental rates climb.
Rising rental prices expand return on invested capital for deployed GPUs and extend the economic useful life of existing hardware, meaning neoclouds squeeze more cash flow out of the same physical footprint before needing to reinvest.
That's the real bull case underneath the chart because power and megawatts are the scarce, fixed input, since Gartner expects power constraints to limit 40% of AI data centers by 2027, while GPU lead times already run 36 to 52 weeks.
If a neocloud already has power secured and GPUs deployed, rising per GPU hour pricing translates almost directly into rising revenue per megawatt with minimal added capex and that's precisely why CoreWeave, Nebius, and peers sit so far above legacy colocation players on this chart.
Colocation companies just rent out space and power but neoclouds capture the pricing upside of the actual compute running on top of it, and as GPU scarcity persists, that spread between neoclouds and traditional colocation should only keep widening.
Bullish on Neoclouds, make sure to follow @MelvinInvests for more AI infrastructure insights and if you want to see exactly what I'm buying as an analyst at Milk Road Pro, you can check out the link below for more.
JordanSolace retweeted
Stanley Druckenmiller:
“That would be my #1 advice to young people: Do not invest in the present. The present is not what moves stock prices. Change moves them.”
JordanSolace retweeted
Given a couple of my friends misunderstood my short tweet yesterday, let me clarify. My post on Hynix was to acknowledge a datapoint for those calling THE TOP of the AI cycle.
I believe it is important as an investor to not just focus on what is supportive of your investment case but even more so to focus on what is directly against it, especially if it is a universally acknowledged loved idea like AI.
Having said that, let me be clear. I still strongly believe this is a “speedbump” which is what I have been writing about since my original post on June 20th.
But a “speedbump” can be ugly as I have pointed out before. Starting in both late 1995 and 1997 there were drawdowns of over 50% in the semiconductor index. But the semi index finished up roughly 850% from the end of 1994 to the peak of the internet buildout in March of 2000 despite this.
Also back then, those drawdowns had fundamental drivers. In 1995, Windows 95 did not lead to the upgrade cycle expected and companies were sitting on a bunch of DRAM inventory. Intel wrote off about $1B in DRAM inventory as an example. There is no excess memory inventories on balance sheets today.
In 1997, the Asian currency crisis forced a slowdown in end-demand. The Iran war and continuation of the Ukraine conflict are both disruptive but there is no general slowdown in demand being caused by them that I can see.
From a technical standpoint, I believe forced liquidations and margin calls in both retail accounts and hedge funds that typically run with leverage over the past couple of weeks is leading to a technical bottom.
From June 22nd, the peak of the momentum trade, the S&P is down only 2.1% and the Nasdaq is down 6.6%. But the SOX index (the tip of the spear in the AI trade) is down 28.6%, the Morgan Stanley Momentum Index is down 38.0% and their Momentum TMT (tech, media and telecom) Index is down 53.5%. The ferocity of these moves in roughly one month has never been seen before in some cases. I believe this has sped up the cleansing process with prime brokers not wanting another Archegos situation.
From a fundamental standpoint, the advent of Agentic AI started arguably at the end of January 30th with the formalization of OpenClaw. This requires 10-100x more tokens than chat-based AI. No question that token minimization is going on at the top 1% of companies which was the main reason for my speedbump concerns but the other 99% are still ramping.
In summary, my view is that we could have seen at least a short-term bottom today with a strong rally ahead of us in the sectors most caught in the latest speedbump. Time as always will tell.
JordanSolace retweeted
$GOOGL: Implied CY26 ROIC worse given capex raised 8% but EPS slightly higher at best given higher rev & expense. Positives: $2.7B rev beat; GCP rev +63% y/y in Q1 & +82% in Q2; Cloud backlog +11% q/q. Negatives: “only” $380M OpInc beat, $150M miss in search rev, $6B FCF burn.
These Google earnings are about to put to the test my thoughts that I ended my post with this past Sunday. “I believe it is prudent to start adding back some exposure in the AI related infrastructure names. But I believe this needs to be balanced with prudence at the public cloud layer…” Will the semis (the tip of the spear of the AI infrastructure trade) be able to rally on this capex raise even when the fastest growing public cloud company struggles with ROIC or was it too early to start trying to differentiate during this AI “speed bump”?
JordanSolace retweeted
Risk/reward seems attractive again.
Lots of cheap stocks with durable competitive advantages that are going to crush numbers for the next 6-12 quarters.
Time will tell!
JordanSolace retweeted
$CSIQ Official guidance of 14-17GWh of BESS shipments in 2026.
That is 75-112% growth from 2025!!!! HUGE!!!
This guidance was provided on July 9th, 2026...
They deployed 2.1GWh in Q1 2026 and guided to 2.8-3.2GWh for Q2. That leaves 9-12GWh to be deployed in H2 2026. Wow! Those are VERY BIG numbers!!
Already starting to build up inventory for such huge demand. $FLNC Fluence mentioned the same in their Q2 earnings call (second photo).
BESS is preparing for a MONSTER H2 2026 IMO...
