Jim Chanos: The Math Ain’t Mathing for the AI Data Center Build

**Guy Adami** (0:00)
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**Dan Nathan** (0:56)
iConnections is the largest membership-only platform for the alternative investment industry, bringing together thousands of fund managers and allocators in one powerful hub. iConnections reimagines how the industry connects through its digital offerings and premier in-person events, empowering allocators and managers to meet, build relationships, and do business anytime, anywhere. To explore more about iConnections, its events, and gain access to the members-only platform, visit iconnections.io. All right. Welcome to the Risk Reversal Podcast. Coming in hot here, Guy Adami.

**Guy Adami** (1:26)
Well, I love this room, and I love the fact that Jim Chanos is here. What do the kids say?
IRL.

**Dan Nathan** (1:32)
IRL. In real life, Jim is a founder and president of Chanos and Co. You've been very generous with your time over the years. We've been doing this, what, how many years, guys?

**Guy Adami** (1:42)
I think we're into our sixth year, if I'm not mistaken.

**Dan Nathan** (1:44)
How about that? Jim, you are a crowd favorite. We appreciate you being here.

**Jim Chanos** (1:49)
Oh, thank you. Thank you for having me on this 100 degree day with Oh my God. Air quality index and gridlock alert.

**Guy Adami** (1:55)
But it's going to break like many things. And with that segue, is there anything breaking right now? I mean, there are a lot of strange things happening in the world, Jim. So I know that's a 30,000 foot question. We'll get more granular, but you know, are things sort of breaking in our midst?

**Jim Chanos** (2:11)
I mean, the S&P is basically at all-time highs, right? Within stone's throw of all-time highs. And yet, under the surface, and we may have mentioned this the last time, but under the surface, there's a lot going on.
A lot of things are acting poorly, and then a lot of things are just going parabolic. It's a really interesting time for stock dispersion, for long short guys. And for us, this has been a lot of alpha on the short side since I last saw you. So, I mean, things that aren't loved by the crowd have basically been shunned.

**Dan Nathan** (2:48)
And just to take a step back for a second, because oftentimes in the press, when you are referred to as famed short seller, right? And so I just want to take one step back and just describe a little bit, when you say we're short this, we're short of that, it's not like you are a short fund, you have a model portfolio. Just explain a little bit for the audience.

**Jim Chanos** (3:07)
We put together a model portfolio for clients, we're no longer running third-party money directly, we're just running our own money and advising institutional clients. So, but we do have a model portfolio.
And that is structured with 40 ideas, but it's designed to be hedged. And we tell our clients how best to hedge it, whether through S&P or more custom hedged. And we really don't want to take a view on the market overall. We want to take a view on our 40 stocks versus the market.

**Dan Nathan** (3:39)
And deep fundamental work is going on there. Let's just kind of go back to the market for one second, because you said stones throw away from all time highs and the S&P. Guy and I seem to talk about that every day. And there are parts of the market away from, let's say, semis and storage and memory, that sort of thing, that have been acting very well. I mean, this week, we've had the, yep. So when you think about just the, you just said dispersion that's going on, today is a great example. You have the SOX down 3%. We're recording this on Wednesday afternoon. You have that DRAM ETF. I think at one point it was down 10%.
Okay, so that whole kind of infrastructure is getting absolutely killed, but the hyperscalers are all up 3%, 3.5%.
They almost feel defensive at this point after they've all sold off, let's say, at least 15% or so. How do you square that a little bit? Because we're going to go deep on hyperscalers versus the infrastructure that goes into it and the like, but this is one of the weirdest days that I've seen in tech in a very long time, and the S&P is flat on the day because of this.