“AI Compute Futures” — Has Wall Street Gone Too Far?

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**Rohan Goswami** (0:22)
Great.

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**Ed Elson** (1:38)
Welcome to Prof G Markets. I'm Ed Elson. It is August 13th. Let's check in on yesterday's market vitals.
The S&P 500 climbed toward a fresh record following the latest inflation report. More on that in a moment. On Cauchy, the odds of a rate hike this year fell to 54%. Meanwhile, the Dow was roughly flat. Brent Crude was relatively stable, as was the yield on 10-year treasuries. CoreWeave shares rallied 19% after doubling its second quarter revenue. And finally, SpaceX shares rose 10% after Elon Musk posted a recording of a company all hands on X. In the meeting, Elon told employees that AI revenue will exceed all other SpaceX revenues by next month.
Okay. What else is happening? Wall Street will soon be trading AI computing power like a commodity. The CME, one of the world's largest futures and options exchanges, announced yesterday that it will start launching Compute Futures in October. Each contract will represent one month's rent on an NVIDIA chip. The idea, in the CME's words, is to turn computing power into a quote, standardized tradable commodity. This could give data center providers and AI companies both price transparency and the ability to hedge against swings in the cost of compute. But it all rests on two big questions. Number one, is compute actually a commodity? And number two, should we actually be trading it? Here to break this down, we're speaking with Rohan Goswami, Business Reporter at Semafor. Rohan, this is the new future of AI. We're financializing it. We're turning it into a commodity. That's the new plan from the CME.
What is your reaction to this? Does this make sense to you?

**Rohan Goswami** (3:27)
Look, we wrote a story a few months ago. This is not a new thing, actually. This has been in the works for some time. Larry Fink made an oblique reference to it at Milken earlier this year, that compute was going to become a financialized resource. We quickly saw a couple of data providers actually step up to try and create the infrastructure for the CME and for ICE to actually offer these as products. I think they like to say that it's like oil or it's like electricity, it's scarce, it's hard to transport, it's sort of diffuse. I don't know that I fully agree with that, if only because oil is not something, oil is actually finite, right?
And so, the idea that this is one-to-one with oil falls apart there a little bit.
And it's also, again, I know you and Ed DeTrone have talked about this a lot, I know you've written about this a lot. It really boils down to what one player decides to do, and that's Nvidia, right? If you think about the forward curve of an asset, you can basically, and for those who don't really understand that, that's the idea of what direction month by month a commodity will trade in. So they can go up, they can go down, right? And if they go down, that's basically suggesting that in the future, things will become cheaper. So theoretically, you'd want to see a downward, trending forward curve with Compute Futures, right? This is logical, as more chips make it to the marketplace, it becomes cheaper and easier for people to actually get their hands on compute. Of course, this isn't actually a free marketplace, it's entirely up to Nvidia, right? The maker of these chips to actually determine the prices, and they are, one could argue, disincented from creating a world where there is, A, price transparency, right? They don't actually want people to know how much this costs, and B, from actually making things cheaper, because theoretically, as the cost of compute goes down, their chips become less valuable. Of course, there's more nuance to that, and I'm not, you know, certainly not you or Ed's at Tron level, versing this, but there are some sort of competing incentives here. And it also, I think, as you alluded to, raises a broader question, which is, do we want to financialize this stuff? Right, I know you talked about this yesterday, but this isn't the only way that Wall Street is starting to dip its toes really aggressively into a space that had kind of before been a closed loop.