@thewallstreetskinny: Key AI Player: the neoclouds: A few things I couldn’t fit into the video: 1. The advance rate, meaning how much neoclouds can borrow relative to the amount of money they need to spend on Capex (to buy chips and equipment) can get QUITE high, in some cases 90-95%+ depending on the credit of the “off-taker”, so from Meta for example. 2. Asset backed financing and project financing (the group I worked in at Morgan Stanley) isn’t new. What is unique about these GPU backed financings are the much SHORTER contract length; in the power world you often see power purchase agreements of 15-20 years and assets that have a much longer useful life (think a gas turbine). 3. What suprised me was the fact that while these contracts are secure enough to raise all this debt, if you look at the balance sheet of an Anthropic, the “take or pay” agreement to buy the compute does not show up as a liability, rather it is just shown as a footnote!! None of this is against accounting rules or illegal, it’s just surprising. Regardless, make sure you are following for part two where we go even deeper into circular financing.

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Tuesday 06 October 2026 18:36:36 GMT