Gerstner notes hyperscalers added over $15 billion in ARR this quarter, the largest ever aggregated.
“In the quarter, if you aggregate the hyperscalers together, we added over $15,000,000,000 in ARR. That's annual recurring revenue, the single largest quarter in the history when you look at that aggregated number.”
Gerstner says Microsoft, Amazon, and Meta all signaled massive inference and infrastructure investments driving NVIDIA higher.
“It's up because Amazon told us the same thing. It's up because Susan Lee from Meta just told us yesterday that they're going to make huge future investments in infrastructure, read NVIDIA,”
Gerstner reports hyperscalers added over $15 billion ARR in the quarter, a record.
“In the quarter, if you aggregate the hyperscalers together, we added over $15,000,000,000 in ARR. That's annual recurring revenue, the single largest quarter in the history”
Gerstner notes cloud providers set record $15 billion net new ARR while reaccelerating from $100 billion run rate.
“Now mind you, these things are reaccelerating in the case of AWS from a $100,000,000,000 run rate, right? So like the, you know, you're reaccelerating.”
Gerstner identifies hyperscaler total CapEx at $200 billion as the real concern drawing criticism and return questions.
“In fact, I think if people are gonna be critical of anything, a lot of people are looking at the total CapEx of the hyperscalers now at $200,000,000,000”
Gerstner says hyperscalers' total capex is now at $200 billion, raising questions about return on investment.
“In fact, I think if people are gonna be critical of anything, a lot of people are looking at the total CapEx of the hyperscalers now at $200,000,000,000 and saying, when are you gonna get a return on the dollars that you're spending?”
Gerstner proposes dedicating individual nuclear reactors at Diablo to major tech companies for their data centers.
“I could imagine if you had four more reactors sitting here, right, if you could land them at the right price, you could have one reactor for Meta, one for Amazon, one for Microsoft, one for Nvidia, you could have the data center sitting right next to them.”
Gerstner cites Morgan Stanley forecasting carbon offset spending rising from $2 billion to $100 billion by 2030.
“In 2020, Morgan Stanley estimates that about $2,000,000,000 was spent on the carbon offset market, and by 2030 they expect that to be $100,000,000,000 by these large hyperscalers that have to buy these massive carbon offsets.”
Gerstner reports Oracle, Amazon, and Microsoft are all moving forward with nuclear-powered data center projects.
“Amazon is buying this nuclear powered Talon data center facility, and now Microsoft this week announces with CEG that they're going to bring 3 Mile Island out of retirement.”
Gerstner notes hyperscalers grew collective revenue from $150 billion to $350 billion in just eight quarters.
“Let me just give you a statistic. It's just eight quarters ago that collectively they were doing a $150,000,000,000 in revenue. Now they're doing $350,000,000,000 in revenue.”
Gerstner cites hyperscaler revenue growth: Amazon 28%, Azure 39%, Google 63%, and Anthropic at historic rates.
“28% revenue growth out of Amazon at tremendous scale or 39% for Azure, 63% for Google, extraordinary. And of course, Anthropic is adding revenues at rates we've never seen before.”