Baker argues that whether AI buildout is funded by debt or cash flows is critical for bubble risk.
“And a very important distinction we will come to is whether or not that build out is funded out of debt or cash flows. It's a critical distinction for AI.”
Baker notes Amazon spent more on CapEx in two years than in the preceding twenty years.
“It's not a comment on Amazon. It's just a comment on the supplier response. They have spent more money on CapEx in the last two years than they did in the preceding twenty years.”
Baker provides specific numbers showing Amazon's CapEx jumped from $62B over 20 years to $87B in just two years.
“From 1999 to 2019, they spent $62,000,000,000 on CapEx. They're going spend $87,000,000,000 in 2020 and 2021. That's crazy.”
Baker says Taiwan Semi will spend more on CapEx in 2021-2022 than in the preceding five years.
“Taiwan Semi, their 2022 CapEx is going to be many multiples of 2019. 2021 and 2022, they'll spend more than they did in the preceding five years.”
Baker notes Taiwan Semi will spend more on CapEx in two years than in the preceding five years.
“Taiwan Semi, their 2022 CapEx is going to be many multiples of 2019. 2021 and 2022, they'll spend more than they did in the preceding five years. So there is a massive supply response coming.”
https://x.com/GavinSBaker/status/2082817582667796992
post Baker notes compute brought on in June may show Q3 acceleration
https://x.com/GavinSBaker/status/2082209435506872408
post Baker finds it funny given worry that Microsoft is about to cut capex
https://x.com/GavinSBaker/status/2081791404905295886
post Baker finds it funny given worry that Microsoft is about to cut capex
https://x.com/GavinSBaker/status/2081791404905295886