CoreWeave Crash, AI Trade Cracks, Anthropic IPO Red Flags, Bill Gates Doomer

Jason Calacanis (0:00)

All right, everybody, welcome back to the number one podcast in the world.

Chamath Palihapitiya (0:04)

Actually, you manifested. We actually were number one.

Jason Calacanis (0:06)

We were literally number one last week. Only took a little bit of time to get here.

Chamath Palihapitiya (0:13)

Only took five years.

Jason Calacanis (0:14)

Only took five.

Yeah, five years went by so quickly. With us today, David Sacks is back. How are you doing, brother?

Ben Horowitz (0:23)

Good. You good? Yeah.

David Sacks (0:24)

Good being number one.

Jason Calacanis (0:26)

Yeah, it's good to be number one. I agree.

Ben Horowitz (0:29)

I agree.

David Sacks (0:30)

I've done an excellent job.

Jason Calacanis (0:31)

You've done a very good job. And now we'll see who takes the most credit for the ascension of the All-In podcast.

Over to you, Chamath Palihapitiya. How's your week been? It's great being the best.

Chamath Palihapitiya (0:47)

It's great being the best. I mean, you know, we would have, I feel like Sacks and I would have gotten here at least 18 months sooner had we not had to drag you on our back.

Jason Calacanis (0:54)

Oh, okay. The point guard who actually put all those times and positioned the wall everywhere you guys wanted it. Yes, you certainly would have gotten there eventually if you guys actually knew how to set up.

David Sacks (1:06)

Where would we be without your constant interruptions? Yeah, sooner. We would have been number one sooner.

Jason Calacanis (1:11)

You would be where every other tech podcast is in the 400s. And joining us this week in replacement of-

David Sacks (1:20)

Also number one.

Chamath Palihapitiya (1:21)

Also number one.

Jason Calacanis (1:22)

Number one venture capital firm in assets under management, I believe. Certainly none other than Ben Horowitz is here. Hey Ben, how are you?

Ben Horowitz (1:31)

I am doing swell. Thank you for having me on the show. It's great to be with the number one team. Yes, the number one podcast in the world. How does it feel to be on the number one podcast in the world?

Jason Calacanis (1:42)

Have you soaked it in yet, Ben?

Ben Horowitz (1:47)

It feels great.

Yes. It is awesome. I feel bigger already.

David Sacks (1:52)

It is amazing that a tech podcast could be the number one podcast on that is bizarre. Apple podcast last weekend.

Jason Calacanis (1:59)

Big docket this week. Good to have you here, Ben. And Friedberg is busy saving the world from famines. And he'll be back next week for all of you.

David Sacks (2:09)

You're retired.

Jason Calacanis (2:10)

He retired at number one. Yeah, he just walked off the court.

That's hilarious. Well, we've had an eventful week. We may have actually had the AI bubble, if there is one, pop or deflate a little bit. The Neo clouds got crushed this week after CoreWeave's bonds started to sell off.

Could be the Canary in the Coal Mine. We'll find out. CoreWeave, Iron, Nebius, these are all the biggest Neo clouds. They're all down about 20% as publicly traded companies. Here's your chart. Here's what happened. Just a little bit of background. On Tuesday, a bunch of people on X, including at Chamath, pointed out that the yield on some of CoreWeave's debt had hit 15%.

The yields are obviously rising because bond traders are worried about CoreWeave's ability to generate enough cash to support its debt. So they want a higher rate of return. Obviously, adding to Chamath's little tweet was a friend of the pod, Elon Musk, who decided to contribute five letters, one word that has since been heard around the world and is at the start of every story. He said, Yikes, Y-I-K-E-S, and that generated a bunch of headlines. Then everything tanked. Yesterday, Wednesday, we tape on Thursdays, as many of you know. CoreWeave, I ran Nebius down between 10 and 15 percent. Even Oracle and Dell took some strays, NVIDIA took a stray as well. They were down 3 percent. CoreWeave is the tip of the spear. They've raised over $35 billion. We had the founder, Michael Intrader on the All-In podcast back in March, in which he explained to me on the All-In interview show what he called the box. Let's roll that tape and get Chamath's thoughts. This is all that debt work. That is something that you guys specialize in.

Michael Intrator (4:17)

I'm going to try to explain this in a way people can understand. So we go out and we find a client. Let's use Microsoft. You brought them up before, right? And Microsoft comes to us and says, we'd like to buy some compute for you. And we say, okay, great, we're going to sign a contract. Once I have a contract in hand, then what I do is I create something. It's not a particularly creative name. It's called the box, right? And what I do with the box is I take my contract with Microsoft and I put it in the box. I go to Jensen and I buy the GPUs. I put it in the box. I take my data center contract. I put it in the box. And now the box governs cashflow. And it has a waterfall of cashflow that comes into it and goes out of it. And so the way it works is then I build the compute and then I deliver the compute to Microsoft and they pay the box. They don't pay me. It goes into the box. And the first thing it does is it pays the data center. It pays the power bill. It pays the interest and the principle. And then whatever's left flows back to us. What's important to understand is the economics in this box are such that within two and a half years of a five-year deal, we have paid for everything. They don't cross-pollinate. They don't cause contagion across the boxes. They're all independent and discreet. As you do this and as you show the lenders how this financing tool and how this financing mechanism works, what they do is they continue to lend you money at progressively lower rates.