Derek Thompson

As Kudrowski explained in our previous episode, these hyperscalers are creating what are sometimes called special purpose vehicles, SPVs, like black boxes into which they throw some money and then some private capital firm throws some money and then that black box goes off and build a data center.

The fact that they're already moving AI infrastructure off their books makes me a little bit itchy about the possibility that they don't want investors to see just how expensive this thing is to build.

In September, the company Oracle's stock popped after it announced a future deal with OpenAI worth hundreds of billions of dollars.

There was a catch.

Oracle won't be able to finance that deal with its cash flow, with the money it actually makes from its business.

It'll have to take on a sensational amount of new debt.

JP Morgan's Michael Sembelist, who has been on the show before and is absolutely fantastic, described the deal this way, quote,

Oracle's stock jumped by 25% after being promised $60 billion a year from OpenAI, an amount of money OpenAI doesn't earn yet to provide cloud computing facilities that Oracle hasn't built yet, which will require 4.5 gigawatts of power, the equivalent of 2.25 Hoover dams, which America hasn't built yet.

But Azeem says it's too soon to panic.

Today, we talk about the steel man case that AI is not a bubble yet.

Like Paul, Azeem is a fantastic explainer and storyteller, and I'm satisfied that Plain English has now presented the strongest possible case for and against AI being the bubble of the 2020s.

And if you wanna know where I stand on this $10 trillion question,

You'll just have to listen to the end of the show.

I'm Derek Thompson.

This is Plain English.

Azim Azhar, welcome to the show.

Thank you for having me, Derek.

So I did this interview with Paul Kudrowski on why artificial intelligence is one big fat bubble.

And it was one of the biggest episodes of the year.

And then I published a transcript of that article for my Substack.