Paul Kudrowski

The lifespan of a GPU is on the order of two and a half to three and a half years.

This is nothing like the spending that's being done on railroads where five years later, completely the same value, or in the case of fiber, a couple years later, light it for Netflix, no problem.

If I build a data center today and populate it with Blackwell GPUs from NVIDIA and hope in three years I can get the same value

Rental prices that I could have gotten today, I'm dreaming.

There's a likelihood I'll get a fraction of that, if anything at all.

So these assets decline exponentially, which is completely different from all these historical bubbles that we were spending on the same level.

So you have this problem that you need to recoup your investment if you're doing this very, very quickly because you're sitting on a depreciating asset, which creates this perverse problem.

So it's, and I hate to say this, but it's reminiscent in some ways of Bitcoin treasury for companies.

So this idea that it made no sense that companies were like strategy, like MicroStrategy, Michael Saylor's firm, were being rewarded for putting Bitcoin into treasury.

Their market value was increasing by $2 roughly for every dollar of Bitcoin they put into quote treasury.

We have the same perverse phenomenon happening here, which is that the market's rewarding you for doing this, even though it makes no economic sense to spend at this level, because there's no way I can recoup the value of the capital spending I'm making over the next three years.

So then you're forced to do these kind of wacky shell games where you say, well, it's okay.

Because the shell itself, not to use shell for two different purposes here, but the shell, the building itself will actually be valuable in five years.

It'll still have energy.

It'll still have water.

I'll still be able to cool things.

The walls will still be standing.

I'll just swap out the GPUs.

But as we talked about at the outset, the problem is the GPUs are the majority of the cost.

So the shell to a first approximation is the thing I'd like to write off.