Carmen Li's Plan to Build a Futures Market for Compute

**SPEAKER_2** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**Tracy Alloway** (0:18)
Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

**Joe Weisenthal** (0:22)
And I'm Joe Weisenthal.

**Tracy Alloway** (0:24)
So Joe, we're still continuing our series recorded from the live show in New York. We had a bunch of great conversations. A couple of them were building off of discussions that we had had previously. And one of those discussions was in Chicago at another live show about six or seven months ago, back in October, we spoke with Don Wilson of DRW about the trading environment, also about his new venture.

**Joe Weisenthal** (0:48)
Right. And so his new venture is one that actually, there's quite a bit of competition and quite an excitement in. And it's essentially like, okay, GPUs, we know they're very important for the AI boom, etc. The question is, can GPU capacity, which is scarce, can it become a tradable commodity such that I can buy futures to lock in my price of access to compute power?
Could I resell those futures? Will there be speculators speculating on the up or down price of like an H100 running an H100 NVIDIA chip for an hour? This is a big question. We know there's a lot of interest in the actual compute, but whether there's interest in compute futures as tradable instruments is a very TBD.

**Tracy Alloway** (1:32)
Yeah. And the analogy that everyone always uses is compute is the new oil, right? So why can't it have a market structure that looks somewhat like the oil market? And there are challenges.
So one chip might not necessarily be equal to another chip.

**Joe Weisenthal** (1:49)
Or one chip, the same chip at one data center might not be equal to the same chip at a different data center.

**Tracy Alloway** (1:54)
Exactly. And so even if you're not interested in AI, what I say here is the market structure questions and the idea of building an entirely new market is really fascinating to me, and I think others will find it interesting too. And we really do have the perfect guest. We're speaking with Carmen Li. She is the CEO of Compute Exchange and Silicon Data. These are the two companies that Wilson is invested in. And they've already announced that they're doing futures with the CME. So really the perfect person to speak to. So take a listen.
Last October, we spoke with Don Wilson of DRW fame, and he was talking to us about his new project, which was basically building out this compute exchange. Now we're here with you six months later. You're actually the one leading it.
How far are you in this endeavor? And remind us, what exactly are you trying to do here?

**Carmen Li** (2:48)
Yeah. So thank you for the great intro and great audience. Before I do that, I'm actually going to call back to six months ago. In the Dom podcast you did, you asked on the question, what if compute prices keep going to go up? At that time, September, October, compute prices were going down, cross all chips. Now, let's see what happened. I think you called it.
I think you called it, Bloomberg called it. So I'm the Founder CEO for Silicon Data. So that's the index provider for GPU indices.
We recently announced partnership with CME. So we will be launching GPU future options from CME in a couple of months, pending the FTC approval, obviously. So that's quite exciting. We've been working on GPU indices for past two and a half years, starting 2024 April. So it's been a while. We launched world's first GPU indices at Bloomberg Terminal in 2025
A year later, we launched the partnership with CME. So it's quite exciting. Separately, I heard you mentioned Compute Exchange before. So thank you for doing that, Joe. I'm the CEO for Compute Exchange, which is spot marketplace for GPU procurement. So we do reserve contracts, forward contracts, as well as refurbished contracts.

**Joe Weisenthal** (4:04)
Let's talk about the variety of options that we have to financialize, compute and so forth. So this came up in the first conversation we had with Ian Dunning. Who is the type of buyer who would want to buy compute on a spot market? Because right, you talk about typically we think it's like these multi-year contracts where some entity enters into a contract with a data center or a new cloud, whatever, and they have this for a while. So who is the buyer or the user of these instruments that might want to buy spot compute or very short-term, short-dated compute futures?

**Carmen Li** (4:43)
It's a great question. So the compute market right now for Compute Exchange, we have all our provider mostly are new clouds around the world. That's one side. Another side is a big variety from AI startup. So even though they are a startup, they spend millions of dollars on GPUs already. They are enterprises who are traditional businesses, but they are needing a node, two nodes, a few servers here and there for their inferencing, or I don't know, other deployment needs. They are providers. They are inferencing providers, right? They don't own GPUs, but they provide open source, open weights, model support for other use cases. So what's the big variety? Most North American firms, they do a variety of combination of contracts. Obviously, on demand give you the most flexibility. You don't pay when you don't use it. However, you also at the mercy of the demand supply curve at any given time. So translate to your price can go from $3 to $6 to $9, depends on the demand supply curve shifting. So that doesn't help when you can have a predictable margin. Also, in terms of scarce, you're not guaranteed for GPU resources for next hour or next month. So you see a lot of people shifting from on demand to reserve even for contracts. So for contracts, you basically lock in deliverables for next whatever month, starting in September maybe or starting November, February, or November.