@thewallstreetskinny: Your ULTIMATE guide to AI’s least understood business: the “Neoclouds”. Here are additional points: 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 (one of the groups 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). In a power deal, the debt is shorter than the PPA, and the PPA is shorter than the asset’s life, which leaves a long tail. Here the loan, the contract, and the asset useful life are much closer in length, so there is a shorter tail behind the debt. While Coreweave does have other types of debt, this structure accounts for over half and funded much of its massive growth over the past few years. They also have a decent amount of convertible debt, which is utilized by higher risk companies; I also worked in convertible debt origination at Morgan Stanley as well so let us know if you want a video on how that works. :) 3. And finally what suprised me was the fact that on the other side, so if you look at an Anthropic’s balance sheet, “take or pay” agreements to buy the compute do not show up as a liability on the balance sheet, rather just shown as a footnote!! While this is consistent with accounting rules, it’s surprising. With that said, there is a huge need for compute and these companies are major players in providing the needed capacity. Many are starting to own more of the infrastructure (Coreweave even tried to buy Core Scientific). #ai #Tech #aiinfrastructure #TikTokTechContest

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Thursday 08 October 2026 18:22:50 GMT