Compute an Asset Class?, Two Wars Becoming One?, and Existing Home Sales Slump 8/11/26

**SPEAKER_1** (0:01)
I love my phone, but not my carrier. What do I do? Well, there are 250 reasons to join T-Mobile.

**SPEAKER_2** (0:07)
Like what?

**SPEAKER_3** (0:07)
You can keep your phone and your number, and T-Mobile helps pay it off.

**SPEAKER_1** (0:11)
Up to $800 per line. So I wouldn't have to buy a new phone?

**SPEAKER_2** (0:14)
Yep.

**SPEAKER_3** (0:14)
Plus, your plan price stays the same for five years on experience plans.

**SPEAKER_1** (0:18)
Nice.

**SPEAKER_3** (0:18)
Find your reason at tmobile.com.

**SPEAKER_5** (0:23)
Be a virtual prepaid guard. Card typically takes 15 days after rebate submission price guarantee on Tark Text and 5G data exclusions like taxes and fees apply.

**SPEAKER_6** (0:30)
Trading at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more. All curated just for traders. Plus guided learning paths with content designed to fit your unique interests. And no sifting to find exactly what you need, so you can spend your time learning to trade brilliantly. Learn more at schwab.com/trading.

**Kelly Evans** (1:01)
Thank you very much, Scott. Stocks are edging lower ahead of tomorrow's CPI report. I'm Kelly Evans and welcome to The Exchange. Shares of Nvidia are in focus today as they're quietly putting together an 18% year-to-date gain after a splashy announcement on our air last night. The company bringing together some of the biggest financiers in the country for a half trillion dollar commitment to fund the AI buildout. Is Compute now its own asset class? We'll tackle that and whether it's a good investment. Plus the latest on Iran as analysts warn it could merge with the Russia-Ukraine war. Could the US end up pulling out of the Middle East altogether? Michelle Caruso Cabrera is here to weigh in. And shares of On Holding, the parent company of On Footwear, plunging 20 percent today after Randy Konick at Jeffreys warned us last week here on this program that it was overvalued and his biggest short call. But let's begin with this massive move by Nvidia to line up half a trillion dollars in financing commitments from some of the biggest names in the business and to make its chips into basically a new asset class.

**David Katz** (2:05)
We used to build chips that we sell and these are technology components that people buy and use. But now, Nvidia's AI factory platform is really an investible asset, an infrastructure asset.

**SPEAKER_2** (2:18)
I look at the financing of data centers.
This is the very beginning like what it was when I started in the mortgage backed securities market in the 1970s. I look upon this as a next future for financial engineering.

**SPEAKER_9** (2:34)
One of the things Goldman Sachs brings to the tables, we have an extraordinary distribution network. We obviously bring capital, but we also bring a very unique distribution network.

**Kelly Evans** (2:43)
Distribution, meaning how you get product out to clients, maybe even to retail investors. Is all of this circular financing? Does it harken back to that vendor financing before the telecom crash? Should compute even be an asset class? Let's bring in RBC's Srini Pajuri, along with Neelai Patel of The Verge to discuss this day. It's great to have you both here. Srini, I'll start with you.
A sensible deal or one that raises some red flags for you?

**Srini Pajuri** (3:10)
Yeah, we think it's very sensible. It's a large and growing market. The opportunity is pretty sizable. And as Jensen put it, this is an investible class because it's generating immediate free cash flow.
And if you look at some of the rental rates of GPUs today, the return on investment is actually pretty attractive. The one example I can give you is that the most recent deal signed by SpaceX with Google and Anthropic. The pricing is anywhere from $5 to $11.
Those are very, very attractive ROIC generating returns. And the way that demand is going and the supply tightness in the industry, our expectation is that demand will continue to outpace supply, at least for the next couple of years. Neelai, do you agree?

**Neelay Patel** (4:00)
I don't, politely, I don't agree.
I'll just look at this broadly from compute as an asset class. This is a huge claim to make, the computer is now an asset class. It is unclear to me why the price of that asset would ever go up, given everything we know about the industry of computing.
The price of compute goes down over time, computers get more powerful over time. Nvidia itself will release new chips that are more efficient, which might depreciate the existing chips faster. I'm certainly not the only person making these claims, asking these core questions. Consolation Research today said, this might be the bell at the top. Ben Thompson said, this AI bet needs to pay off, comparing it to railroad financing in the 1800s. There's a lot of questions here about what compute means. And fundamentally, what we see is token prices are going down. I think that's the more relevant unit of compute overall.