1 00:00:00,960 --> 00:00:04,559 Speaker 1: You're listening to a share these podcast I want to 2 00:00:04,559 --> 00:00:05,400 Speaker 1: come back to them video. 3 00:00:05,920 --> 00:00:09,319 Speaker 2: There's a company that, as you say, it's got a 4 00:00:09,400 --> 00:00:10,920 Speaker 2: huge future ahead of it. But a lot of that 5 00:00:11,039 --> 00:00:15,079 Speaker 2: is based on not money that's coming from you or 6 00:00:15,160 --> 00:00:19,439 Speaker 2: I using an application and paying anthropic claude or whatever 7 00:00:19,440 --> 00:00:21,759 Speaker 2: it is to use it. It's coming from these companies, 8 00:00:21,800 --> 00:00:25,240 Speaker 2: these hyperscaler companies, Meta and so on, that are putting 9 00:00:25,400 --> 00:00:28,440 Speaker 2: huge bets, huge capital purchases and so on in there 10 00:00:28,480 --> 00:00:31,560 Speaker 2: and saying, oh, yes, we'll buy this many chips, We're 11 00:00:31,560 --> 00:00:32,960 Speaker 2: going to invest this much. I want to try and 12 00:00:32,960 --> 00:00:37,199 Speaker 2: get a bit of a sense whether the buildout is 13 00:00:37,240 --> 00:00:39,800 Speaker 2: going to be sustained, because the adoption part doesn't seem 14 00:00:39,840 --> 00:00:42,040 Speaker 2: to quite be turning into money at the moment. 15 00:00:42,479 --> 00:00:44,920 Speaker 1: As you say, the revenues in the video are linked 16 00:00:44,920 --> 00:00:50,800 Speaker 1: to continued capital expenditures from these hyperscalers Amazon, Microsoft, Meta 17 00:00:51,440 --> 00:00:54,240 Speaker 1: and the one the willingness of them to continue to 18 00:00:54,280 --> 00:00:56,960 Speaker 1: spend that money, and then actually the ability to for 19 00:00:57,080 --> 00:00:59,200 Speaker 1: them to continue to spend it by raising finance and 20 00:00:59,200 --> 00:01:02,480 Speaker 1: to keep expending this. And to give you some context, 21 00:01:03,000 --> 00:01:05,880 Speaker 1: these companies might have been spending around about thirty billion 22 00:01:05,880 --> 00:01:08,399 Speaker 1: dollars of CAPEX per year. A couple of years ago, 23 00:01:08,640 --> 00:01:10,880 Speaker 1: we've got some of them spending two hundred billion dollars 24 00:01:10,920 --> 00:01:13,959 Speaker 1: per year. So Amazon was aspected to I think it's 25 00:01:14,000 --> 00:01:15,760 Speaker 1: coming into this year is expected to spend about one 26 00:01:15,840 --> 00:01:18,080 Speaker 1: hundred and thirty billion, one hundred and forty billion in capex. 27 00:01:18,080 --> 00:01:20,319 Speaker 1: That just told everyone it's going to spend two hundred billion, 28 00:01:21,280 --> 00:01:22,920 Speaker 1: and so you can kind of track written in the 29 00:01:23,000 --> 00:01:27,120 Speaker 1: video's revenues. So the video is expected to generate revenues. 30 00:01:27,160 --> 00:01:29,360 Speaker 1: So it was high three hundred billion dollars next year, 31 00:01:29,520 --> 00:01:33,560 Speaker 1: might be three fifty to three seventy. That number needs 32 00:01:33,560 --> 00:01:36,240 Speaker 1: to be directly tied to these Hyperscalar's capecks and a 33 00:01:36,240 --> 00:01:42,560 Speaker 1: big five companies out there, Amazon, Meta, Google, Microsoft, and 34 00:01:42,600 --> 00:01:44,800 Speaker 1: you can sort of include some unlisted ones like Xai 35 00:01:44,840 --> 00:01:47,880 Speaker 1: and there. They spent about four hundred billion last year 36 00:01:47,880 --> 00:01:50,360 Speaker 1: in capics. It's expected to probably be around about seven 37 00:01:50,560 --> 00:01:54,000 Speaker 1: fifty billion or even higher. Might even go high seven 38 00:01:54,080 --> 00:01:56,960 Speaker 1: hundred billions in twenty twenty six. It's a massive jump. 39 00:01:57,440 --> 00:01:59,280 Speaker 1: Navidia is going to capture a big share of that, 40 00:02:00,600 --> 00:02:03,040 Speaker 1: but then market's probably comfortable. They probably go, yeah, we 41 00:02:03,080 --> 00:02:04,560 Speaker 1: know they're going to spend the capecks this year, but 42 00:02:04,560 --> 00:02:06,080 Speaker 1: they need to do it again. We need to keep 43 00:02:06,160 --> 00:02:08,400 Speaker 1: raising that number and raising it. And these are companies 44 00:02:08,440 --> 00:02:10,359 Speaker 1: that haven't really had to go into debt very much 45 00:02:10,400 --> 00:02:12,919 Speaker 1: at all in the last ten years. You're now seeing 46 00:02:12,919 --> 00:02:15,959 Speaker 1: them be free casually negative. Meta is going to be 47 00:02:16,040 --> 00:02:18,880 Speaker 1: free casually negative this year. Amazon's going to be free 48 00:02:18,919 --> 00:02:21,560 Speaker 1: cashing negative. Google's barely making any for they've got the 49 00:02:21,560 --> 00:02:23,960 Speaker 1: most profitab business in the world. Right. These guys generifer 50 00:02:24,000 --> 00:02:26,720 Speaker 1: rate hundreds of billions of cash flow, tipping all of 51 00:02:26,720 --> 00:02:30,799 Speaker 1: that in capex to build data centers, a big chunker 52 00:02:30,800 --> 00:02:33,880 Speaker 1: that goes to the video and then they still don't 53 00:02:33,880 --> 00:02:35,640 Speaker 1: actually have enough cash, so they're going to be raising debts. 54 00:02:35,639 --> 00:02:38,280 Speaker 1: So they're tapping the debt markets now to help fuel this. Right, 55 00:02:38,440 --> 00:02:41,600 Speaker 1: and everything's going well and people seeing ai've been used 56 00:02:41,600 --> 00:02:43,560 Speaker 1: more on the utilities working. I think you can get 57 00:02:43,600 --> 00:02:46,280 Speaker 1: confidence that this keeps going. But what happens if you 58 00:02:46,280 --> 00:02:48,760 Speaker 1: get a period where all of a sudden, expectations and 59 00:02:48,800 --> 00:02:50,600 Speaker 1: AO softens, Then all of a sudden, that's when the 60 00:02:50,600 --> 00:02:53,840 Speaker 1: pressure comes on and everyone wants to see there's a return. 61 00:02:54,080 --> 00:02:56,000 Speaker 1: I mean, you're going to spend two hundred billion dollars 62 00:02:56,040 --> 00:02:58,520 Speaker 1: of capis. Investors want to see a return generated on 63 00:02:58,560 --> 00:03:01,120 Speaker 1: their CAPEX and at the moment pretty high uncertainty on 64 00:03:01,160 --> 00:03:02,200 Speaker 1: what their return is going to be. 65 00:03:02,560 --> 00:03:05,640 Speaker 2: Investing involves risk you might lose the money you start with. 66 00:03:05,919 --> 00:03:08,480 Speaker 1: We recommend talking to a licensed financial advisor. 67 00:03:09,200 --> 00:03:13,040 Speaker 2: We also recommend reading product disclosure documents before deciding to invest.