[upbeat music] What's up, y'all? Welcome back to Blockspace Live, brought to you by CleanSpark. Everything's green, Charlie.
We went into the weekend with hope of a ceasefire and a peace deal, or rather a peace deal following the ceasefire, and it seems like this one might finally stick.
So to start the show, we've got an update of the market for y'all, from stocks to Bitcoin to interest rates. See how people are digesting the news that the Iran war could be soon closing.
We also have discussion of, speaking of war, and Claude's dastardly capabilities.
Anthropic pulled the plug on Fable 5 and Mythos on Friday or Thursday last week after concerns from the US government that there was a vulnerability and a jailbreak of the latest frontier model.
After that, we have Jay Patel of Lygos on to talk about a number of news items in the market, specifically the Iran war. Also, maybe we'll talk a little bit about the Anthropic news.
And then we have a note on Iron completing a 490 megawatt acquisition in Spain. We have news of the EPA at Politico Summit saying, "We're not gonna do any wholesale regulation of data centers.
We're gonna leave that up to the states and localities." And then we'll wrap it up with a note on Core Scientific's Marble facility in North Carolina. That's right.
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Search Blockspace which, in whichever search bar you are listening on and subscribe there. This show is brought to you by CleanSpark, Nasdaq listed ticker CLSK. Colin, it's a green morning, so you know what that means.
Boom. Green bar on the bottom of the screen because- We love to see it. Yeah, you love to see it. Um, now if you're, if you've been exposed to the stock market, you've probably had a great year so far.
If you've been exposed to Bitcoin miners, former Bitcoin miners, now power shells, you've probably had an even better year. If you're stuck holding Bitcoin, finally today you don't have a terrible,
uh, you're not having a terrible day. And in fact, let me show you right here. Crypto broadly is up. Um, pretty much all of the top 10 except for Tron are up. Bitcoin up 5% on the week, 67,000.
And notably, we talked about this, we've been covering Zcash. Zcash was fully recovered to where it was when the Orchard vulnerability disclosure went out. So, uh, it's like it never happened, doesn't matter.
That's about all I have to say about crypto. I think we gotta go to SpaceX. This is the stock everybody's-- I was asked by a, a lady on the s- street in my neighborhood about SpaceX over the weekend.
Like, that is how common this, uh, topic is. Markets are now things you talk about with neighbors in passing. So- And I feel like in, in prior markets, that's been usually indicative that it's time to sell.
You know, there's like kind of the joke that, oh, once, like, you know, your plumber is asking you about, you know, the hottest AI stock, maybe you should de-leverage. But I, I don't know, man.
The, the old rules seem to just continue to be eschewed by this market. I mean, we covered this in the newsletter last week. SpaceX is trading at, like, 112 x 2025 revenue, now even more since it's up on the day.
And most people can't wrap their minds around that.
But as we've talked about before, the thing that's going to bridge the gap right now between their, you know, far-flung aspirations and the stars and actually grounding this company to reality currently is their AI business.
And I think, you know, more than anything, other than the fact that Elon Musk runs this company, people are looking at xAI and Starlink and saying that the, these are the things that give them hope in it right now, not necessarily, you know, missions to Mars.
But, you know, it, it's also unsurprising given that there's probably just general tailwinds in the market generally, given news of, you know, hopefully an imminent peace deal in Iran.
And I wanna share this really quickly, Charlie. Yeah. There's been-- I would call it a, it's a peace fire. It- A peace fire. I'm not really sure which one it is. It's a l- it-- Yeah.
I think we're not gonna shoot any more missiles, but we'll see. We've had a lot of false starts, but it seems like this one might actually stick. Yeah.
It's really been like the boy who cr- the president who cried peace for the past, like, three months. Yeah.
And even that, there was, uh, some equivocating there where Trump said they were gonna sign it on his birthday, maybe before the UFC fight on the White House lawn.
But Iran said that no, um, it's gonna come sometime in the next few days.
It looks like there's supposed to be a, a peace deal, or there's supposed to be some sort of conference in, in Switzerland, I believe, to finalize it. But all that being said, markets are reacting favorably to it.
The chance of a rate hike in 2026 have fallen to 32% as people's, uh, inflation fears are moderating.
Um, if the Strait of Hormuz is opened up under the current deal after it's signed, uh, Iran has 30 days to open it, and then there's going to be 60 days of follow-on talks for more specifics on the deal.
But stocks are ripping, Bitcoin's up, chance of a rate hike plummeting, and oil is falling with it, so... I mean, the first good news, uh, on this, you know, [chuckles]
first good news on this geopolitical mess for a while. Yeah. And it will-- And we'll, we'll talk about this with, uh, Jay from Lygos here in a little bit. Um, I think it, I think it might be time to, uh, show-
Uh, oh, shoot. I was gonna pull up the, uh, Anthropic, uh, pre-IPO chart on Hyperliquid, but I think I'll leave that for now. I think we should go to the hyperscalers
because, uh, we're gonna pull up this metric, this dashboard from DI Metrics. We had BZ on on Friday. Recommend you go listen to that. And he talks about this,
uh, dashboard, but this is probably gonna be a regular haunt for us on the show here as we can, uh, be a little more precise about category of companies, uh, for the industries that we cover.
So among the former Bitcoin miners now pivoted to AI data centers, uh, among the power shells, we have a net of 6.2% up on the day. Neo clouds are up 11%. Hyperscalers, Meta, Google, Oracle, 3.8% up.
Other, uh, sub-sectors also up. Storage up pretty big. Um- Big moves, man. Uh, storage has been just ripping. I do think,
uh, you know, it's, it's good to see, uh, Hut, Keel, Wolf, Riot, Cores all up on the day. Cipher as well. It's kind of funny 'cause, uh, we had Tom from Sphere 3D on a couple times over the past month.
They're down 10%, but they've also had kind of a wild, uh, month just doing some- Yeah, I mean, they absolutely surged after the merger with Cathedral was, was finalized. [laughs] Agree.
[laughs] All right, Charlie, let's, let's touch on Anthropic really quickly before we get Jay on. Yeah.
'Cause there's-- This was news that came at the end of last week, and I think it blew a lot of people away, and it's the latest chapter in this ongoing beef between the US government and one of the premier frontier models.
I'll, I'll let you kinda take the he- the lead on this one. Yes.
So if you weren't paying attention, Anthropic had been building up their new fancy, powerful AI model, Mythos, which they finally released with guardrails to the public on Wednesday of last week, I believe.
Wednesday and Thursday proceeding as normal. Uh, on Friday, Anthropic notified that they were taking down or removing access for Fable to, uh, to Anthropic customers.
And this is because of a spat with the US government. Here is David Sacks, uh, Advisor on Science and Technology to the President, who kind of sums up what happened.
As we know, Anthropic publicly released its Mythos class models earlier this week under the commercial name Fable.
Fable is Mythos with guardrails, but if those fail, you're exposed to Mythos and its advanced cyber capabilities to people who shouldn't have them.
And David does emphasize that part of Anthropic's marketing was absolutely that Mythos is this kind of god-class AI model, which, uh, is dangerous if in the wrong hands.
So this is literally part of the both marketing and, uh, speak-- you know, messaging from their engineering and marketing team.
A highly credible trusted partner of both Anthropic and the US government who was testing Fable came forward with a jailbreak of those guardrails.
The admin asked Dario, president of Anthropic, to fix the jailbre- jailbreak or de-deploy the model. Dario refused. It's since come out that it was Amazon, an engineering team at Amazon, who, uh, broke these jailbreaks.
To note, Anthropic is a portfolio company of Amazon, adding to the intrigue here. Anthropic says in a blog post, the jailbreak isn't serious. The US government disagrees.
Anthropic, uh, says things like, "Oh, well, GPT 5.5 from our competitor, OpenAI, also has the same capabilities."
Kind of challenging their marketing for Mythos overall, as well as, uh, maybe downplaying the severity of this. Really hard to make an evaluation here, frankly. So then the US government ad, uh, issues an export control
on the model, saying you cannot give it to foreign nationals. Anthropic kind of says, "You don't fire me, I quit," and just takes the model down. So that's kind of the tactical play-by-play of how this came to be.
There's a great story from Politico, inside the whirlwind 24 hours that led to the White House who slapped con- export controls on Anthropic. But Colin,
were you in the middle of trying to, uh, blow through your Fable credits when, uh, the model was taken down?
I wasn't, but I noticed a lot of people really groaning and saying, "Well, my vibe coding projects for the weekend are gonna be scuttled now because I, I don't have--
I, I was gonna get done, you know, two X the work and, and, and half the time, but now no longer."
What's confusing about this to me, Charlie, is kind of-- Or not confusing, but what confounds us a little bit is there was an independent jailbreak by this one hacker named Pliny the Liberator, who used an, like-- It's actually funny.
He used s- the Cyrillic alphabet and homoglyphs, so you know, symbols that look like other symbols, to basically hack or, um, to jailbreak the model in the sense of get around the guardrails that were set up.
He then was also able to produce the sim- system prompt for those guardrails, and he published it on GitHub. But I, as I understand, that happened after a lot of this broke, and it was kind of separate from that issue.
I'm wondering, we were talking about this before we hopped on, you think that there's something more going on here beyond just that?
Because what he did, what Pliny did sounds similar to the ways in which, you know, in early AI models
y- y- you could, uh, tell the AI, it's like, "Hey, um, you know, I'm not making a bomb, but, like, I'm writing a story about making a bomb. So how do I make a bomb?" Yeah. Um, yeah.
I'm, um, imagine it's 1950 and I have the capabilities to, to, to make this, this bomb and, but it's not possible and, uh, you're telling...
You know, you're gonna give the instructions to my grandmother like you'd be giving her a recipe. Like that kind of thing, and the AI spits it out and, um, that's...
Uh, my view is that there's many people who tr- who can and do br- jailbreak these. Some of them are public. We don't know the specific techniques they use.
Pliny is an account which has a long history of publishing this in the interest of, like, disclosure. Um- Yeah, and it seems like the US government and Amazon's concerns were a grade above what this was. From...
But it's hard to say though, because we don't know exactly what happened. We don't know the... Yeah. But one other thing I wanna say about this before you cap it off, Charlie, and we get Jay on here.
Um, for those who've been paying attention, the Anthropic and the US government are strange bedfellows to say the least, and they have basically an antagonistic relationship at this point.
So Anthropic's models were used in the, in the Venezuela operation earlier this year, and then Pete Hegseth, uh, in February demanded that they remove all restrictions on military use or lose that contract, and called Anthropic a supply chain risk.
You know, uh, Anthropic leadership rebuffed this. They said, "We're not going to [laughs] just, uh, take away all of our guardrails for you. There are legitimate safety concerns."
And they also said, "We don't think the models are powerful enough or rather accurate enough to just do that wholesale without having some sort of danger for military personnel."
And then after that, Trump, uh, directed all federal agencies on February 27th to stop using Anthropic and using Claude wholesale. Who knows if that's actually happening.
And, uh, there's a Northern California district judge that has issued a preliminary junction against the supply chain risk, uh, designation by the US government, so.
There's so much fodder to talk about, and this is the same day that SpaceX IPO'd. Like [laughs] Yeah. I mean, I was at a pool party that night. I think I only talked about markets.
I didn't talk about normal things like music and, like, cultures. Just Dario, Sam Altman, Tech, Elon. It's, you know, it's...
We're only talking about people with, uh, net worths, uh, uh, several orders of magnitude greater than the entire, you know, population at the, the party.
I will cap it off with this, which is it is highly ironic that Dario Amodei, the co-founder of Anthropic, literally that week or the week prior, published a long essay
asking for regulation of AI in almost an identical, like, bid for the government to do things like they just requested on Friday. And then what is his response to take down Fable?
So, um, highly recommend you read, uh, all, you know, Dario's essays 'cause they are, um, insightful. Whether or not they're right or not, I'll leave it up to you. We're gonna...
We got, uh, Jay Patel waiting in the wings. We're gonna talk more about markets broadly. Um, it sounded like the war ended. He may be able to tell us if it did or not.
But before that, a word from our sponsor, CleanSpark. [gentle music] We are CleanSpark, America's Bitcoin miner, a publicly traded company with the largest operating hash rate,
powered entirely by self-operated infrastructure across four states. This is our proof of work, and we are setting the standard for what's next.
Learn more about the intersection of energy and Bitcoin at cleanspark.com. All right. We are gonna bring up Jay. Jay, welcome back to the show.
How you guys doing? Great. Pretty good, man. It's a good day. Things are green. Even Bitcoin's green. I mean, we're, but, you know- Even, even Bitcoin's green. [laughs] But no more Fable. [laughs] Yeah.
Did you, did you have a chance to try it out? Were you, uh, were you trying out Fable in the middle of the, the call? Yeah. Yeah. I used it for a good bit on, I think, what? Thursday and Friday.
And going back, you definitely feel the difference between Fable and 5.5. I mean, I, I have no particular unique insight versus what everyone else has already said about the export controls and the shutdown.
But I will say, if you're Anthropic and you're compute constrained, and you're Dario who loves to say, "We're building a super weapon. Regulate us. We're building a super weapon,"
I don't know, maybe, like, the whole story about, you know, government asks you to patch the jailbreak, and you're like, "I could patch the jailbreak," and then people could continue using Fable even though we only have, you know, what?
Eight more days or nine more days before API costs kick in and everyone's gonna complain.
Or you could not patch the jailbreak and then let the news drop that, "Oh my God, it's so dangerous that the government has to place export controls on this, you know, mythical model named Fable." Um, I don't know.
It seems to have backfired based on all these, like, pre-IPO trading venues pricing Anthropic's market cap.
But it kinda fits with the narrative that, like, you know, we've built such a powerful weapon now that the government must restrict even how we can deliver it to our customers.
But, you know, they're probably limited on GPU capacity anyways. Yeah. It's very convenient for them to not have to pay through the nose, uh, or let... I mean, I was running into all sorts of, like, limits.
Uh, I was sleeping five-hour windows so I could maximize my Claude subscription. Okay. So- SpaceX IPO'd, Anthropic, uh, took down Fable, and apparently we have a ceasefire in the Strait of Hormuz.
Jay, what does this mean for the markets? They're going up, but, like, what's your first take on this?
Look, I think there's definitely some level of, I don't know if you wanna call it insider trading or folks with prior knowledge to what happens when the administration makes decisions.
But it seems like this ceasefire will hold.
It seems like interest rate expectations have actually come down relative to other announcements that there's going to be a ceasefire or there is a ceasefire, and then Israel decides to bomb wherever, or there's a ceasefire and then we...
you know, there's a US naval vessel that gets attacked or whatnot. Um, so it seems a little different.
Uh, with interest rate expectations coming down though, I think that is kind of a good sign that, you know, the market seems to think that the risk of a longer term, you know, inflation shock based on energy has kind of dissipated.
Um, and you know, that's why you see tech stocks rally, the market's rallying. Bitcoin is rallying.
So I think we're back into, oh, Bitcoin is, you know, probably just a risk asset and a liquidity sink rather than some sort of hedge on the war because, you know, if you thought that Bitcoin would be a great asset if there was a war, then theoretically the, the tail risk of a war going away should do the opposite.
Um, we'll see how long that holds. I will say one thing that is interesting is, you know, the US was kind of insulated from the energy shock.
Like, yeah, we had gas prices and oil prices impact us slightly, but if you go to other parts of the world, right? If you're in Europe, if you're in Asia, they were much more impacted, right?
They don't have strategic reserves. They don't have as much domestic production. And so there, I think you'll still see kind of, uh, some inflationary impacts, right? You see Japan is still probably gonna hike rates.
Other parts of the country or other parts of the world are gonna have increased interest rates.
Um, so, you know, you might even see a further dispersion between like US equity markets and, you know, the rest of the world.
Although I guess Japan and South Korea are experiencing somewhat of their own boom with semis. But yeah. Um- Yeah.
It seem, it seems to me that the Fed rate hike pro- uh, probability is like one of the clearest signals that this is, uh, drawing to a close. Also, yeah, oil has collapsed, um, since- Mm-hmm... this happened.
I mean, the last I checked it, W- WTI was below... the July contracts were like below $80 a barrel, which is really nice to see. I think they peaked just above one twenty. Um, and y- you said it right, Jay.
Most of the rest of the world is like much more vulnerable to, uh, th- this, this war and the shock of it, um, a- as, as a result of that. Um, I mean, are, are you, are...
Do, do you think this is clear signal that like we're, we're past this though? Like are, are you- I think so... are there a part of you that's still kinda holding out and thinking, "Well," you know.
I- It's so many false starts with the- I think the administration does i- i- you know, in general, what is good for markets, and they take market
feedback, uh, you know, as the, the strongest signal of what they should be doing, whether or not you think that's the good thing or, or a bad thing, you know.
Trump is continuously tweeting about where the S&P and where the Dow Jones are and how that's a great indicator of, you know, his administration's job at handling the economy and, you know, geopolitics.
I think with whatever we see over the next few days and, you know, what I imagine is some market momentum around there being a peace deal, I think they'll try their hardest, and they'll probably make concessions they otherwise wouldn't to make sure that they don't have to walk it back.
You know, once you've gotten the congrats from the market, it really sucks to open the door and say, "Hey, actually, like we weren't able to figure anything out. War is still on." So I think they'll figure something out.
Um, the other thing that was interesting that you mentioned about oil, right?
If you think about $120 barrel oil, that was basically pricing in the distribution of outcomes that could happen over the next six to 12 months, which, you know, is do we get back to sub $80 a barrel like we are now, or, you know, it could have been much worse.
It could have been, you know, maybe 150 plus dollars a barrel if the war kind of prolonged and China ran through its reserves. Um, you know, we ran through more of the SBR that we have here.
Um, you know, it could have been much, much worse.
Um, and so, you know, I think it's in everyone's best interest to kind of get past this, whether or not you think it's a good deal or if the war was worth it in the first place or whatnot. Um, you know, I think most,
most everyone on either side wants to move past it.
You, uh, mentioned when you were kinda giving a overview of global markets that like Korea, Japan, some of these Asian countries are having a nice run with semi- with semiconductors. Um, but
that's against the backdrop of another topic you might wanna talk about, which is the kind of inflationary shock of energy prices and how this affects like Japan raising rates, uh, to fight inflation. Uh,
as we use more and more energy and energy prices become more difficult to obscure in the face of inflation, what does this do to countries like Japan and markets like that? Yeah, I think, you know,
there's, there's probably two pieces to this. One is obviously, you know, if you think about J- Japan less so, but definitely Korea. Like Korea has a reputation for being like a gambler's market.
Like, um, you know, if you think that Bitcoiners or crypto folks or degens in the US, you should go to Korea. Like they're degens for everything, right? Um, and when you have... I think Samsung is what?
Like a third of the market, maybe more now, 40, 45% of the market. I think the top three stocks are like 65% of the market. And basically, if you throw a dart at any semi stock in the Korean market, it's up.
Somewhere between 200% and 2,000% over the last year. So I think there's two problems that they have to deal with.
One, it's great that, you know, you have these domestic companies that are doing so well, but there's definitely gonna be a strong wealth effect.
These people have a lot more money that they are invested in than, than, than, you know, they did a year ago, and so they're gonna spend a lot more money and there's gonna be that inflationary effect.
And then on the other side, you have the fact that, um, oil takes a long time to get from one spot to another, right?
So the fact that the Strait of Hormuz was closed for so long is going to have a prolonged impact on, you know, South Korea and Japan. And so I think you're gonna see some inflationary pressure, pressure there.
Japan particularly is interesting because it's, you know, you know, the low interest rates in Japan have kind of been a source of capital for the rest of the world for a long time, right?
You think about, like, the yen carry trade and the fact that to some extent low interest rates in Japan kind of subsidized investments in the rest of the world.
If we're, you know, moving towards Japan that's going to have higher rates for longer and more focused on developing their domestic economy and, you know, potentially a more conservative economic posture, I wonder what that means for the rest of the world.
I will say that I'm not, like, one of these AI skeptics, though.
I think that, like, there's parts of the market that are frothy, but clearly there's been value created in the US, and I don't think it's dependent on Bank of Japan keeping the 30-year, uh, yield low or something like that.
I mean, I'm looking at, uh, the price of Bitcoin in Korea and which almost always trades at a premium just due to, like, banking controls and the fact that they are kind of degens.
In the US and everywhere else in the world it's, like, 66,000, 67,000. In Korea, it's roughly, uh, adjusting for exchange rate, like, $80,000 per. Um, so yeah. Uh- I mean, that's good to...
Uh, I, I, I guess this goes into another thing that you guys mentioned, which is I think the setup is good for Bitcoin, but I am not... Let's say, you know, I don't believe that we're gonna make new highs this year.
I think we'll make new highs sometime early next year, and I think the setup will... You know, if, if the current market holds, we'll get into an uptrend.
Um, but the thing you have to think about with Bitcoin is it's competing with all of that hyperscaler CapEx like you mentioned. There's capital that needs to go into the SpaceX IPO.
You know, whether or not Anthropic and the US government resolve whatever's going on, it's likely gonna IPO in the next six to 12 months, as is OpenAI.
I don't know if you guys saw the news this morning that NVIDIA, a company with I think it's, like, almost $100 billion in free cash flow, is issuing $20 billion in bonds, which gives me the sense that basically everyone is trying to scoop up as much capital as possible because they understand that there will be a scarcity of capital as more of these companies IPO, as more CapEx needs to be done, you know, across the neo clouds, hyperscalers.
Bitcoin miners now becoming AI data center companies.
And so, you know, from Bitcoin's perspective, that just means that they, like, even if rates don't go up, even if rates potentially go down, there's a different sink for that capital, which is the AI trade.
Um, and I don't think that's permanent, but I think for a while that could kind of, uh, dampen, you know, Bitcoin's amplification to liquidity that it has in the past.
So yeah, it seems pretty obvious, uh, to me, Jay, and you, you s- you spelled it out very well there that there's just been a total liquidity suck into this new trade. That's no- Bitcoin's no longer the new shiny thing.
I'm wondering if you think that we've seen a true flush out or capitulation, though. Like, revisiting 60K, you know, there's two ways to read that, I think. One, we revisited it and we balanced.
The other way to read it is do we really get that, like, gut-wrenching capitulation event that we usually see when a bear market has hit a bottom. What do you think? Yeah.
I'd say sentiment, like, if you, if you go by Twitter sentiment, the bear market's been brutal, right?
But if you really go by price, like, I think we probably would have had significantly more pain if we went down to, you know, 50,000, 55,000.
Um, and the fact that we didn't get there makes me think that if this Iran conflict,
I don't know, gets unresolved, because, you know, at a moment's notice, we could say that, "Hey, there's no deal," or, I don't know, Iran decides to bomb some more airports or whatever, um, and, you know, we're back to square one.
I, I think that you're right.
I think there's, there's still the realistic possibility that you could get down to 55K, which is why, you know, I think if you're a Bitcoin holder out there and you're, you know, you're levered or you're running some sort of options trade, I think everyone thing, everyone should contend with the possibility that we could, you know, get down to below 55K.
You know, I would not be super levered long.
I think that it's definitely a good time to buy and it's an awful time to sell, but that doesn't mean that it's a good time to, you know, go max leverage, um, like the folks in Korea are clearly.
[laughs] I guess, uh, to kinda wrap this up, you mentioned SpaceX and it's this IPO. We got through it. The markets haven't collapsed totally. It's not been this black hole of everything yet. Um, [clears throat]
and it's gone up, what? 25% on day one. It's currently, uh, up 14% on day two. We're sitting at $183-$184 per SpaceX share. Um, I love rockets.
I love Elon's data center in space idea. Um, I have a hard time, uh, understanding why this company is well over $2 trillion right now, and it hasn't, uh, and nobody's blinked yet. Uh, is, is, is... Does this...
I, I'm gonna, like, bid for you to comment a little bit on what we see with SpaceX for the next few months. Do you think it's like a... Do you like the stock? I mean, what do you, what do you think is gonna happen?
Look, I think if you're trying to find some sort of f- Fundamental valuation modeling approach to get to the SpaceX st- stock price making sense, you're not gonna find it. Um, I, I think there is...
Look, look, even, even the most sensible folks I know, the, the, you know, the investors who model every, you know, equity that they invested out, even those, a lot of those folks invested in the IPO or, or were private investors in SpaceX because they believe that it's an investment on the future of humanity.
And that you can't put a price on, right? So I think that's one part where it's like, you know, it's an Elon company, which means that it, you know, you are not gonna be able to tether it to reality super strongly.
And then it's also, like, this kind of dream for humanity, which, like, maybe there's some intrinsic value beyond the actual value of the equity.
The other thing that I think is related to, like, AI in general is I think there's some subset of companies that people, I don't know whether it's rightly or wrongly, are kind of pricing as, like, there is a small chance it's worth infinite, right?
Like, there's a small chance that they become everything. And if you're part of that trade, if you're NVIDIA, if you're OpenAI, if you're Anthropic, I think there's...
I- in a, in a investor's mind, you can make any kind of revenue multiple work if you think that, you know, in the out years revenue will be infinity because they will produce massive super intelligence, or they will mine asteroids, or they will get humanity to another planet or whatnot.
Um, and, you know, if you're a, if you're a Bitcoin investor, I, I, I tell this to a lot of folks, it feels bad to underperform the market right now.
I think there will be some companies that will outperform Bitcoin, as they should. They'll provide real value to humanity, and therefore they should outperform money. Um, but that doesn't mean the market is going to.
Like, I think if you're thinking about, uh, you know, like the semis that we were talking about, I don't know if every memory stock is going to continue to go up 50% a year for the next 10 years. Probably not.
You might get a couple years out of it, or you might get a couple hundred more percent. Who knows? But I'm sure a lot of those will crash.
Um, and who- I don't know who's qualified to decide which memory suppliers will stick around and which won't. Um, but, you know, those seem to be much more commodity producers. Elon's selling a unique dream, right?
There's no one, I don't know, maybe with the exception of Blue Origin, competing in the whole, we are putting payloads into space at an increasing rate for a decreasing cost. Yeah.
That's something we covered on Friday is, like, there are legitimate moats to this business, and I think that's part of the mult- multiple too. I mean, and some of the technology stack is, uh...
so far hasn't been licked by anyone else. Reusable boosters. They, their Starlink is the only, you know, globally available, uh, satellite internet. So
you're definitely right that, you know, that h- in a lot of ways, Elon Musk is selling a dream, and how do you, how do you even put a price on that, you know? And I'm not even necessarily, like, a, uh...
I'm bullish SpaceX long term, assuming they can actually continue to solve some of these problems.
And maybe I'm a fool for not thinking that this valuation is fair, but it's hard to look at 112 x revenue [laughs] and put, and push- Yeah, no, no, I agree.
[laughs] On a pure revenue basis, it's hard to justify, but I'm almost thinking like, "Hey, I'm doing my piece to maybe invest in the future of humanity by putting- Right... some money into SpaceX." Right.
And I don't know how reasonable that is to do, but I think there's a lot of people out there who are like, "I'm not gonna be on that ticket to Mars, but I want someone to be on that ticket to Mars, and if I can put, I don't know, 100 bucks into SpaceX, maybe that makes a difference."
Yeah. We gotta wait for all the, we gotta wait for all the unlocks. The next 365 days- Yeah... will be just periodic unlocks, bigger and bigger, I think, as the year gets on.
So we'll get to see how many SpaceX janitors want to go buy, uh, eight-figure mansions. Uh, so we'll just, we'll have to go see. Jay, thank you. Lots of mansions in Starbase. Yeah, a lot of mansions.
A lot of, a lot of quickly built prefab mansions going down in So- [laughs] Southern Point of Texas. Jay, thank you so much for coming on the show. Love to talk markets with you, and we'll catch you again soon.
All right. See you guys. See ya, Jay. You know, one thing I was thinking about when we kicked off that segment, maybe Anthropic was the sacrificial lamb we needed for the next leg up in the market. I'm, I'm fine.
As long as I can still, uh, use Claude Code in all my workflows and skills, then, uh, I'm happy. Although I sure wish I could use Fable.
It'd be nice, but remember, Charlie, Anthropic killed Fable in the cradle so your portfolio could stumble a few more inches upward. Yeah. [laughs] Yeah. And
it, it's, the, uh, the reason SpaceX is going up is for no other reason than I don't own it. [laughs] Okay. We are gonna keep going. We've got, uh, Iron, big deal, going to the EU to do AI.
EPA rebuffs calls to regulate data centers, and Core's energizing a site. But before that, a word from our sponsor, Luxur.
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If you'd like to get started, go to luxur.tech/commander. All right, Charlie. Big news for Iron today. They're going to the degrowth continent. Just kidding.
[laughs] Iron completes Nostrum acquisition and adds 490 megawatts in Spain for Europe AI cloud push.
Now, this deal was announced in May- It was, uh, subject to, you know, customary closing conditions and I believe regulatory approval. And now Iron is announcing that they have completed it.
And what this will give them is four hundred and ninety megawatts of secured power in Spain for building AI data centers. Iron noted that this increases their total power portfolio to five gigawatts.
I believe that's secured power. I think that if you look at everything net-net in terms of what they have in their pipeline, what they have their eyes on, it's a little bit more than that.
But quote here from Daniel Roberts, "Europe is one of the largest and fastest-growing markets for AI infrastructure, and Spain is among the mo- its most compelling entry points.
With abundant renewables and strong fiber connectivity," Roberts said, "Nostrum gives us secured power today, along with a development pipeline and a great local team, excite-- we're excited to work with."
What's interesting about this to me, Charlie, if these notes can be believed, 'cause the, like, the estimates for total data center capacity in Spain is rather, rather sparse.
But if this is true, Iron might have one of the largest footprints in the country in terms of allocation for data center space. Just a few stats here really quickly.
As of twenty twenty-four, according to Clean Bridge, Spain's total IT data center capacity was five hundred and, or three hundred and fifty-four point nine megawatts. Um, like m- half of that is in Madrid.
Aleasoft puts the range somewhat lower at two hundred to three hundred and fifty megawatts of installed capacity, around two hundred data centers, with a figure that could rise to seven hundred and thirty megawatts by twenty twenty-six.
And that market is expected to grow, um, according to some, some other estimates here. By twenty-thirty, uh, the data center market in Spain is expected to grow to four point seven nine gigawatts.
Microsoft has a three hundred megawatt first phase build in Aragon. Blackstone has a five hundred megawatt Zaragoza campus.
Amazon, Microsoft, and Google collectively have more than one gigawatt under development across Madrid, Barcelona, and Aragon. So
a growing market it seems, but what I think is really interesting about this again is Iron seems to have a significant foothold considering there's not that much going on in the country.
Yeah, and Iron's been focusing internationally. They got-- This is hot on the heels of their announcement in Australia. They have, they signed that five gigawatt deal or just delivery deal with, uh, NVIDIA.
Um, also from our reporting, and I think this may be a little, uh, underappreciated, um, which is that according to the Nostrum CEO,
um, there is a sovereign AI dimension to this where i- in that maybe this might have some kind of EU g- government-backed,
uh, component to it, which I think is pretty interesting, 'cause yes, China's put some money towards this, a few billion.
Uh, the US has, uh, not really taken as proactive approach in like b- up, in backstopping, uh, private, uh, developers as much. But, you know, if the EU wants to get behind this, we could see, uh,
you know, the mix of sovereign-backed AI, uh, higher in the EU, which wouldn't be surprising to me actually.
Yeah, it wouldn't be surprising to me either for a number of reasons, just given that the regulatory environment in the EU is much more big brother and hands-on than the US.
Similarly in Canada, we've seen Hive really beat this drum of partnering for sovereign AI rollouts with Canadian government.
And it makes sense that you would see the same thing in the EU, specifically these Western nations that just quite frankly have less of a backbone in this area.
They don't have nearly as much infrastructure for these data centers.
Um, their, their regulations, ironically enough, have choked out a lot of the potential for build-outs, especially in Europe, where they're kind of, in Canada, where they're really kind of partaking in some pretty insane energy policies.
Um, it's kinda why I, I joked about the degrowth thing.
But to me it seems almost necessary that like if they want to have an AI footprint, the government is going to have to partner with some of these companies just for the fact that no one's building over there.
And so if you're worried about AI as a national security issue, you're gonna have to find some way to develop it with these companies because that's kinda the regulatory hole you've pigeonholed yourself into.
Whereas the US, we don't really need to do that as much because everyone's building these things in our backyard. And as we've seen with the US government with cl-- with Anthropic, right?
They'll just go to one of these companies and say, "We're gonna use your stuff."
Whether or not they can, whether or not it's legal, TBD, but they have their pick of the litter, so to speak, in the US government because the majority of the innovation is here.
Yeah, it seems like the only thing the EU exports anymore are regulations, some of which are actually kinda good, like that, uh, like the internet, like tracking one, and then, and then they got Apple to add USB-C.
So they're doing a couple good things [laughs] I suppose. We're gonna keep on rolling. We're gonna talk about, ah, regulations. How about that transition?
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this story is in light of a lot of Americans, uh, being anti-data center, many people have asked the US Environmental Protection Agency to institute nationwide environmental requirements for data centers.
The EPA director, EPA administrator Lee Zeldin says that they will not be doing this.
Quote, "10 out of-- 10 times out of 10 I'm not going to sit inside of an agency building in Washington, DC and say that we know that local community in Georgia or Florida or Arizona or elsewhere better than everyone there locally."
TLDR, the EPA is refusing to set environmental requirements for data centers, saying this is rather a state-by-state issue. Dare I use the term states' rights or state regulation? Shocking development.
The conservative EPA doesn't wanna make wholesale decisions on the federal level for data centers. And I, I'm gonna obviously show my political bias here, if I haven't done enough already on this show.
This seems incred-- and totally reasonable to me, you know, uh, especially when you consider that
as, a-as, as, um, as he said during the summit, you know, quote, "You can't just across the board act as if every data center project is equal."
Like they're all following the same exact model on how they power their v- their project in various ways or how they cool their data centers. So it really depends on how the deal gets done.
I, I, I agree with that, and also I think that trying to establish some sort of broad mandate would needlessly hamstring a data center in Texas that might be totally fine based on all of the available information in terms of its water use and energy, and if you're basing that on rules that people wanna make out in California, it doesn't make any sense to me.
Um, I'm sure there are some things that maybe they could do that would be reasonable, but I think broadly speaking, having too much of a ham-fisted approach to this on the federal level will, um, kind of just run afoul of what made the data center revolution really kick off in places like Texas, so.
Yeah, I mean, I think if you're the EPA and you're looking at what specifically you can regulate, um, a lot of folks are concerned about water use. In fact, this is, like, often the number one or two, like, thing.
I go into Facebook groups, and I see everybody's freaking about water.
And the thing is, if you were to, like, look at how much water and where it's used and how it's used, you realize this is mostly a red herring topic that is incredibly misleading and, uh, not really a valid, a strong, valid, consistent reason, uh, to be anti-data center.
I think if the EPA were looking at the additional generation, specifically natural gas, and how those generators are deployed and turbines are deployed, you might have a more compelling purview in that now it's an environmental thing.
You've got heat sinks. You have to consider that. Um, but I think generation's already quite regulated in the US. I don't know if the EPA can do a whole lot more.
Um, in this article from Data Center Dynamics, which I have here, um, it does, uh, point to, uh,
that, uh, this is on the heels of the President Trump-initiated Ratepayer of Protection pledge, which saw some of the big tech companies commit to paying for power grid upgrades needed to serve their facilities, which I think actually is a much more compelling, uh, like, uh, guardrail around the growth of this industry because it's really not water, it's power- Yeah...
and the growth and effect on the power grid, which is probably the least certain and probably... Yeah.
Which is funny because Politico cites a poll where they say 37% of Americans don't want a data center in their community, and the primary concerns were water usage and air pollution. Yeah.
The air pollution thing's really funny to me because these data centers aren't producing-- They're not factories. They're not spilling smoke into the air right now. Well, the r- this is where the data goes to get stored.
It's a big old warehouse, and the data goes in there, and they- And then they compress it... print it out, and it s- spews out the big smoke stacks on top of the data center.
Yeah, and then they compress it and then fire it with coal, and then it produces data center, uh, h- uh, you know, exhaust. Yeah, turn those-- You gotta turn those zeros to ones.
But, you know, to me, that, it shows how little people actually understand about how these work.
Um, especially the water usage angle, I can understand that misconception based on how traditional data centers cool with evaporative cooling, but the, uh, the pollution one I, I really can't because the data centers themselves are not polluting any more than a, uh, office building is polluting.
But to your point, Charlie, electricity, and this usually is actually on the top of the concerns with a lot of these polls like Gallup, that one is, is legitimate.
The federal directive, um, that Trump announced in March is interesting because it's a pledge, and it's kind of toothless in the sense that there's no real way to enforce it.
But this kind of goes back, I think, to what the EPA is saying here with not just jumping in to regulate data centers.
The fact of the matter is the US government can say those things, but it's really up to the local utilities and the local power authorities to figure out how they're gonna do that.
And ERCOT, I think, is a good example of this.
ERCOT's been changing their rules for interconnection large loads, uh, or interconnections of large loads, and they're saying, you know, "We're going to have to start seeing the interconnection requests come with..."
A commitment to invest in infrastructure, right?
Whereas in, in the past, in some of these cases, the utility would build the transmission, they would build the infrastructure, transformers, substations, et cetera, for these big builds.
Now ERCOT's saying, "You're probably gonna have to do that if you're asking us for, you know, 100, 200, 300 megawatts. You're gonna have to build that infrastructure."
So there's a future in which, um, amazingly, you know, and paradoxically to some people who are worried about electricity prices rising, that you would actually have infrastructure invested in by these data centers to make the grid, uh, cheaper and more efficient for everyone.
Yeah, and you, and you see this even, um, in this, uh,
message from Governor Greg Abbott in Texas from, uh, I believe last week, uh, saying that the Public Utility Commission of Texas needs to prioritize that the data centers, instead of increasing ratepayer, y- your average p- person's electric bill, that they reduce it.
And this, um, means that the data centers need to, quote, "Pay for all of their electric infrastructure costs to assume n- to ensure that no residential ratepayer is burdened by these costs," and the PUC and ERCOT need to review their existing authorities to identify necessary actions that can be taken under those authorities to safeguard Texans.
And, um, I would use this as an example where, um, you can get messaging at the national level, and you can get, you know, commitments from hyperscalers, but it's kind of like committing to, like, a DEI initiative.
Like, it's not-- It's just kind of a public promise, and you can try to do that, and it's probably in your interest to do it at some level because you ha- you, like, you have this intangible, um, like, risk, which is that people don't like you.
Uh, and so you need to protect against that.
And so, uh, I really do think, yeah, commitments to, like, making sure that people who-- normal people's power bills aren't affected dramatically by this because, uh, that can be a long-term systemic issue.
People don't trust tech and AI. People especially don't like data centers now, and it's broadly popular. You gotta think a few steps ahead.
Um, I think the water issue is, like, maybe a losing battle just because [chuckles] the average person wants to think false things. But the power one is real because- The power one is real.
The, the, the power one is real, and it might run afoul to some people of the administration, and specifically the EPA's refusal to regulate data centers more broadly. And what I mean by that is they're, you know...
Uh, the EPA recently rolled back certain restrictions on coal plants. They want to get coal plants back online for base load. We're gonna burn beautiful, clean coal. Clean coal. We're gonna burn baby coal.
And you know, I will say, this is something that a lot of people across aisle may or may not be happy with.
I haven't looked into the specifics about, you know, uh, the, the coal plants that they're proposing to put back online. Um, you know, how, quote, "clean" is the coal? What are the filtering, you know, systems in place?
Not, not ev- The, the coal plant of, like, you know, when you look at, you know, watch, watch, like, "Peaky Blinders" or something and, and, you know, Birmingham is just coated in smoke, you know? That's cool coal.
That's cool coal. That's when you're smoking and you're wearing your black trench coat. Yeah, when we had, when we had- Yeah... little three-year-old toddlers, you know, being chimney sweeps, smoking cigarettes.
You have twenty-year-olds. You got little, yeah, razor blades in your hat, so. Yeah, and I think that's what people think about when they think of coal plants.
And, you know, even coal plants in, from the '50s and '60s are much different than the newer generation ones that we built a few decades ago with cleaner filtration systems.
That being said, though, the decision to do that will look from, from the environmentalist wing of the left as an indication that they don't care about that and that they want to-- they don't care about the pollution that's going to result from the coal, uh, data centers and, and things like th- or, sorry, from the coal fire plants for these data centers and things like that.
But you need that base load to address what we were just talking about to make sure that the prices don't increase.
And the United States government in January was interfacing with PJM officials after PJM basically had a deficit of energy, uh, during one of their peak periods, saying, "Look, you need to get, um, more figure.
Um, you, you need to overhaul your market rules to build more than fifteen billion of base load power generations to make sure that this corridor," which is seeing a lot of interest from these data center companies in terms of building out gen-- uh, building out lo- uh, capacity.
Uh, they, they're, they're going to need significantly more investment to furnish that. And the last thing I'll say about this too, Charlie, before we move on, a- and, and if you have final thoughts,
the power generation thing is absolutely, um, a crucial f- uh, a crucial part of this. But I think if anything, you can just look at Texas to prove that
as long as your state is committed to building new generation, you can mitigate those concerns and actually roll out these data centers in a responsible way.
And the actual hostility towards data centers in a place like Texas, while it may be across aisle in some cases, as we have here from the Data Center Infrastructure Metrics dashboard, DIMetrics,
Texas has one of the most favorable index ratings in terms of resistance to data centers. And by that, I mean they're incredibly, uh, permissive.
And in fact, here the, uh, the distinction is preemptive because they are taking steps to make sure that they can furnish all of that load.
But if you live in a place like California where everyone seems to hate data centers and hate AI, you're probably not going to get them anyway because your electricity prices are too expensive.
California has the, I believe, third highest electricity rates in the nation behind maybe Hawaii and Alaska.
And so certain states are just going to preclude any sort of data center footprint by nature of the fact that they don't build any generation anymore, and their grids are way too expensive to use already.
And One last note on Dimetrics. We have a question here from Steve Byers. How can I get access to Dimetrics? I'm glad you asked. DI metrics. D- DI metrics. Thank you. DI metrics. Uh, head over to DI metrics.
That's D-I-M-E-T-R-I-C-S.ai, and, um, you can find the sign-up page there. We are going to include this in the show notes, a link to it.
So if you are listening to this and, uh, you're listening to the show on YouTube or Spotify, head over to the show notes. We'll have a link, and y'all can check out the website. Um, super valuable.
And, um, and, and to, to note, we had, uh, Brandon Bailey, who created this dashboard on last Friday.
Really important, um, there, uh, it in- the subscription tier includes an MCP code, so you can actually wire this to your favorite LLM, and you can pull anything from this dashboard, bar a few,
bar, bar a few data sets, I think, like this, um, this heat map for data center acceptability. And you can just pull directly from this database, so you don't have to scrape through everything.
So if you have questions about prices for GPUs or certain financial data on these different stocks, you can use an, an MCP and just pull directly from your LLM, so. Yeah. Certainly recommend. I've been using it.
I'll be tweeting about it a lot this week, uh, because, uh, stocks are more fun when they're all in the same place to, uh, on your dashboard. Dimetrics dashboard. Um, we are gonna keep going.
We have one last story today. This time Core, Core Scientific energized a 65 megawatt site which has been in the works for a little while. I'll let you take this one. Yeah.
So this is just more of a note to remind people- You're on a, that's on the previous... Yeah. Oh. Um, thank you, Charlie. This is more of a just, uh, this is more just to remind everyone that this happened. Um- [laughs]
Yeah. [laughs] Oops. You're building the c- You're building the cash. You're building the cash. [laughs] Uh- Um- Right. Yeah, cry because it happened. [laughs] Yeah, cry be- [laughs] So anyway.
Yeah, so Core Scientific act- energized this in April or May, or rather delivered the ener- the energized facility to CoreWeave. But Adam Sullivan tweeted about this today.
Quote, "65 megawatts delivered in Marble, South, uh, North Carolina." This is part of Core Scientific's deal for 590 megawatts of capacity with CoreWeave.
They announced it on their earnings call on May 13th that this had been energized and handed over, and, uh, Adam was just tweeting, reminding everyone about it.
But I just wanted to pull this up to kind of remind everyone about this CoreWeave deal, 'cause it was the deal that set off the whole AI pivots among the Bitcoin miners.
And fitting enough that Adam should text this because as I understand, this is, was Core Scientific's flagship facility that they s- that they started building out in 2018. [lip smack] And it was a brownfield.
Now it's servicing HPC capacity for CoreWeave. Just a note on that CoreWeave deal. Marble is one of five sites that's under a 12-year, $10 billion contract for 590 megawatts.
The largest of these are Denton, Texas, at 260 megawatts, followed by Dalton, Georgia, at 175, Muskogee, Oklahoma, at 70, Marble at 65, and an Austin, Texas, facility at 20 megawatts.
[lip smack] More than 450 megawatts of build c- capacity is anticipated by the end of this summer, with the full 50-- 590 megawatts on track by early 2017, or 2027, excuse me.
So once that full 590 megawatts comes online, that will make Core Scientific the first former Bitcoin miner turned AI factory to deliver in full their first HPC contract with a neo cloud.
So all that being said, kinda old news, but just, you know, hats off to the team. Interesting to really see this thesis play out. And again, they pioneered this whole thing in, in- Yeah... a lot of regards.
Some people would quibble with that, but Core Scientific was the first deal that made people realize that this was going to be a major trend, so. Yeah. And I'll just remark on how, you know...
So Adam Sullivan posts this great, uh, bird's-eye view, uh, of the facility, and I just gotta remark on how, uh, it ever-- You know, the more that these things go on, the more, the more that they look like, um, like Factorio builds or Satisfactory.
Like, look at this. You know, these factory building games, if you're familiar, or, uh, Satisfactory.
Like, it just kinda looks like, uh, you know, these factory optimization games now more and more every time I see, uh, overviews of, like, fully built out operating sites. So really cool.
Uh, you know, who's-- I wonder who's gonna beat the game first. [laughs] So on that note, thank you so much for listening to Blockspace. Blockspace Live is brought to you by CleanSpark, Nasdaq listed ticker CLSK.
If you are listening on CoinDesk, subscribe to Blockspace RSS feed because CoinDesk is ending now. Thank you very much. Great time at CoinDesk, but we are on our own feeds now.
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