Episode 917: Meta Is Entering the AI Cloud Business. Which Stocks Are at Risk？ Photon Computing

**Martin Shkreli** (0:00)
We have Meta launching their own cloud. Pretty huge news. Using their excess capacity, selling it off. Meta stock's up. A lot of the component makers are down, worry that Meta will soak up kind of their demand. Meta's new cloud will soak up their demand. But I think this just makes sense from Meta's perspective. It's a new customer, one. And then if they serve models and things like that, it could be a net increase in demand. You know, there is just be this little kind of small amount of, of, you know, excess kind of chips kind of, you know, being rented out. But if they have too many chips, it's also maybe a little bearish, right? Where it's like, well, SpaceX and Meta are kind of these bumbling firms that don't have enough chips. Excuse me, have too many chips. And so, you know, here they are. You know, they've bought way too many of these things. And then, you know, they have a way to get out of them now by selling them. And certainly SpaceX has done that well as well. So the question is, when do they re-up? If they're going to re-up, are they just re-ing up for the same customers like OpenAI and a few other guys? So, you know, is this a double whammy where not only do you have Meta saying, we don't need more chips, we got enough. And not only that, but we need to sell off the chips we got now. So we're not only not going to buy more from NVIDIA, NVIDIA is going to have a hard time selling more. You know, godelterminal.com, check it out. That's our sponsor and the company that I founded to make great financial software. Okay, so what do you do? I think you buy, but I also am wondering what, you know, how hard this hits. Yeah, I mean, look, if they have enough memory, if they have, excuse me, if they have enough compute, you just wouldn't think that you'd start a cloud. You know, Elon started a cloud because he was just, he bought so much of this stuff and his team was disorganized, the wrong people, et cetera.
So, how do you, you know, you know, sorry, just, I don't, you know, I think humanoids are a little weird. I mean, it's certainly, certainly intriguing sector, but it's a little, it's a little early. You know, clearly Boston Robotics is interesting. Anyway, so what's going to happen here to memory and GPUs? I mean, I think, certainly the first reaction is, you know, very scary for, if you're a competitor to one of these guys, if you're, say, you're a nebius or you're, CoreWeave, you know, now you got to compete with Meta, great. You're going to, you know, and they were the customers for, for nebius and CoreWeave. So I think Meta's sitting there saying, if we're going to be in the data center business, we might as well take clients on too.
But again, a little odd, I mean, what, you know, would you, if you're open AI, go to Meta, a bit of a bizarre thing to do.
So this is going to definitely shake the, shake the space a bit, but I think cooler heads will prevail. I don't think things have changed overnight, so I'm buying. Neuralink's amazing, yeah. I mean, Neuralink, but Neuralink's really for people who are extremely sick. Neuralink's not meant for normies. They're meant for, it's meant for people who can't walk and move. That reminds me, I told my friend about it. Why is Amazon up? Good question. Yeah, you would think this is a little bearish for Microsoft as well and SpaceX, but I don't know, like I said, I think cooler heads may prevail here. It's not, you know, let's see, where did this exactly come from? I mean, we, this is Reuters, I guess came from Bloomberg News, Meta's building a cloud to, um, it's a Lexus Compute, it's a Bloomberg Report. Computing power and models, setting up with a... Okay, well, this is, you know, if it's computing power where you can use their model with the compute, that's not bearish. That's, I think, expected. That's not really a competitor. That's, that's actually kind of bullish. Um, there's a way big difference between Meta saying they're overbuilt, renting excess compute with that. Kind of like, well, if we're going to provide you the GPU plus model, maybe we'll provide you the model alone. Well, that's open source. And we'll provide you the GPU alone. It certainly, it could be a bit more nuanced than maybe the Bloomberg article is suggesting. They're seeing some recovery in the stocks as we speak. Microns still at 5, 6, 7 percent. I'm going to read the article from our competitor, Bloomberg. It's Meta's building cloud business to sell excess AI compute. It was by two authors there. Meta is developing plans for cloud business that will sell access to AI computing power and models. Meta has been rushing to secure expensive data centers and other infrastructure to fuel its own AI ambitions. It's forming a business to generate revenue from excess computing power sold to outside customers. One potential plan includes selling access to various AI models that are hosted on Meta's existing AI infrastructure approach similar to Bedrock. And Meta would run data centers and chips that power the model. That makes sense, including its own new Spark models and charge developers to access them. The company is also considering selling access to raw computing capacity akin to Neo Clouds. Well, I mean, I think the first one is not bearish. That's expected. The second one is kind of, well, we don't know that they're doing that.