Nvidia Just Revealed the Next Phase of the AI Boom

If oil was the commodity that was driving all these other infrastructure buildouts and booms or coal in the case of railroads, what is this new commodity going to be? And it is compute. It's all comput. It's all chips and it's all computing power. >> The computer is now part of the infrastructure like electricity, like the internet. And so you have to think about it like it's infrastructure and build it out accordingly. >> As this boom continues, there is a very strong case to be made that compute is now the new commodity. And how do you have those things traded? You can't really have compute become the new commodity without Wall Street buying into that. and figuring out how they're going to finance it. >> Welcome everybody into another edition of Coinage. I'm your host Zachman coming to you live from our Brooklyn studios here in New York City. Thank you for joining us as we are digging into the market reaction to the big latest CPI report, the latest reading on inflation in America and markets reacting positively to the fact that that reading came in very much in line with expectations. Want to bring up the chart here from our friends over at the Wall Street Journal. Looking at how this tracks inflation 3.4% in July, down modestly from the month prior. Uh there is the chart. We're going to chat what that means for the overall state of things in the market. Plus, also a huge shot across the bow. Maybe that's not the right turn of phrase. Uh it's a huge move in terms of what we're seeing in the AI trade as Nvidia made big news on CNBC with a round table for the ages. Basically everyone in Tradfi uh including Larry Frink on for that interview as Jensen Wong talks about bringing Wall Street into the AI compute trade. It's something by the way that we had already heard from one of the leading minds in the perpetual future space. Lighter founder Vlad was chatting about this with us at ETHcom a few months ago. It blew my mind when we heard him talking about it, but basically trading compute and bringing up futures markets per H100 index. And we're going to dig into that and what that means for what I think could be a second wave of the AI trade. And when you look beyond uh Nvidia to some of the other names, uh still very strong reactions to the beats and the money slloshing around as it comes from the big tech giants and as they continue to figure out what they want to spend that money on. We're seeing uh some beneficiaries including Coree that stock up uh pretty considerably today around 20% now in today's session. We'll dig into that as well. Just kind of reassessing where we are in this trade as crypto continues to hold up well as well. But let's kick things off on the inflation front. And where's our rundown? Is it always over here? There it is. That's the one. It was a dovish CPI report, I think, in terms of what we are seeing play out um uh in this reaction. Just want to bring up the numbers one more time uh as we were talking about them off the top of the show here. Um, and we are going to be playing a few of the clips from Jensen Wong around this because obviously coming into this report, everyone is trying to figure out how is this going to uh inch the Fed uh and the thinking there around the September decision? Are they going to become more doubbish increasingly or more hawkish and lean into the idea of really I think wanting to tell people that look chair Fed chair WSH is going to do what he's got to do even though he's chatting with Trump he's not only going to listen to President Trump on these decisions and this is the these are the odds we were watching these play into uh this report and of course you can also look at the swings in the bond market uh some alleviated pressure there but obviously an eight-point swing in terms of expectations of a Fed uh of the Fed maintaining rates where they are kind of signaling here that the pressure is certainly off. And that is my general takeaway from this inflation read as well. Uh unsurprisingly, when you dig into the numbers, it is basically all energy. Uh let's bring this up over here on the CPI report. I mean, this has been the game all year. Obviously, everyone knows this. It's been all of what's happening in Iran, how energy is trickling through the economy and what that means. And obviously, nothing in a backward-f facing print is going to matter if you have uh new updates uh showing that maybe we're heading in the wrong direction when it comes to chats with Iran. And so, you know, it's this is the tricky spot that everyone, including the Fed, anyone who's investing right now is kind of caught in is you can take uh everything you want from a backward-f facing report, but still kind of have to stay on your toes given the fact that what you saw in this report. Doesn't really matter if uh oil prices start to tick higher, which we're kind of seeing today as again talks with Iran not necessarily right now heading in the right direction. if you consider that we just heard um from our Treasury Secretary last week saying that we would have a deal by now and nothing to speak of quite yet. However, in the report, energy prices dropped 1.5% for the month following a 5.7% decrease in June. Um so you have that to consider. One of the other pieces, I know this isn't top of anyone's list necessarily, but I do think it's funny and important to highlight here that we did see lettuce prices uh fall considerably, 16.4% down. Why? Because no one wants to themselves. Turns out uh diarrhea no good for product sales. And uh again, I think it's also important to maybe pair the gap on that one, too. I was viewers of the show know by the way that I look, I don't eat that many veggies. Um, and I don't really know if we're able to eat lettuce anymore. So, I'm using this as an excuse to maybe feel better about myself, but uh kind of funny to look at sweet green shares as well. They did mention that uh the claspora, am I saying that right? Claspora, I think I am. Uh, the outbreak has been impacting them as fewer and fewer people want to eat lettuce. And it's just kind of interesting to see the thread uh consistent there in the CPI report. Of course, that's not what anyone was watching for. No one was really trying to figure out, hey, what's lettuce demand look like right now in the CPI print. Um but no matter which way you slice it, chop it, toss it. See what I did there? Uh no matter which way you look at it, I mean, I think again this is exactly what the street wanted to see in this inflation report. Cooling across the board, uh especially cooling and lettuce. Um, but just in general getting closer and closer to I think people overlook this, you know, we'll see what happens with Iran. Obviously, the election uh midterms coming up seems like there's only one exit option here for President Trump, but as you dig into it, you know, if oil gets fixed, the rest of everything else included in this report is operating as you might expect. Um, and so if you're trying to hit a 2% target, you're not really far off here with this one. Uh again, you can take a look at CNBC's chart, you can take a look at Wall Street Journal's chart, you can read the CPI report for yourself, but generally this is the read, I think, on this and we're seeing the market react comfortably. Um and so very good, very good. Everyone's happy uh with that. And of course as we are seeing kind of the idea of uh the Fed holding steady come September as those odds continue to improve more and more people I think buying into this idea that we could see a second wave of the boom times and through the first half of the year certainly even before that the boom times have been driven by none other than the big AI levered names. I'm talking Nvidia most importantly. And earlier this week, we did hear from Nvidia's CEO and co-founder Jensen Wong talking about a huge shift. Again, as a former CNBC employee myself, they do do a good job of playing up the theatrics of all of this. And if you didn't watch, you had Jensen Wong surrounded by uh Wall Street giants as they announce half a trillion dollars in a new initiative across all the big giants in Shroudfi and uh Nvidia here to essentially bring more funding to the uh AI compute uh world. I just want to play a little bit of what we heard from Jensen Wong first as he kind of set this up before he gets into uh Nvidia specifics, but just kind of talking about why this matters so much. Um, and on the back end of this, I don't know, Texas, did we cut this already before or not? We did have a graphic to kind of show uh how the AI buildout compares. I'll bring it up if not, but maybe we start with Jensen Wong just talking about this on CNBC. Take a listen to how he framed this huge $500 billion announcement. >> We're announcing six partnerships today. These partnerships are going to pull together independent long-term capital to fund and support AI infrastructure buildout. This is an extraordinary time as you know because this is the first time in some 60 years that the computing industry is going through a fundamental platform shift from the way that software was done before to the way that it's going to be done in the future called artificial intelligence. Fundamentally what's different about this industry and this way of doing computing is that the computer is now part of the infrastructure like electricity like the internet and so you have to think about it like its infrastructure and build it out accordingly. Now I mean we've talked about a lot of what is happening before on coinage. So I'm going to toot our own horn here, our collective horn because this is something uh that Akos a decentralized deep pin project and Gregor Sururi who's a coinage member as well has come on talked about this the idea of building out the Airbnb or different ways to kind of start to lean into unlocking unused chips out there. Um the thesis obviously if we brought up a a chart of uh a cautious token a lot of deepin tokens obviously don't look like Nvidia's stock chart but again the thesis around what this could begin to look like um and just the sheer demand has been proven true when you when you listen to what Jensen Wong's saying here um and there's two pieces to this one I'm just going to echo what he's talking about in terms of the size of the infrastructure buildout in AI right now. This is a chart from Bloomberg uh in a pretty crazy oped when you consider how big this investment wave has been for AI. Their point I'm pretty sure in this is that if you stripped away all of the AI spend in terms of GDP right now, there's a case to be made that we would be in a recession were it not for all the investment being made in this right now. And when you when you step back and think about the size of it, it's bigger than railroads almost. It's close to a pretty uh crazy margin to consider, you know, not quite 2:1, but certainly more than that. Um, when it comes to investment we've made in highways, telecom, and fiber, and a lot of our viewers probably weren't around. I don't think could anyone say they were around for the railroads buildout? How old would you be if it was 1870? Quick mental math there. You'd be dead probably. Um, anyone survived Gettysburg? Um, but yes, it's it's crazy when you think about how much money is being put into this. But I think the point that Jensen Wong and why this announcement was so big is another element that I think does back up what he's talking about here, which is uh something that he made in this huge uh this huge essay that he put out on X. If you don't want to watch the full interview on CNBC of what he's talking about, um there's also this to go off of and essentially it's talking about if oil was the commodity that was driving all these other infrastructure buildouts and booms or coal in the case of railroads, what is this new commodity going to be? And it is compute. It's all compute. It's all chips and it's all computing power. And you need to bring along financial partners that can build this out as an investable asset, which we're going to hear Jensen Wong explain in a second. But this is kind of the chart, as I'm going to bring it up right now, that explains why he is probably right. And this is something that we heard from Gregorosuri and a lot of others who have built around the idea of compute is an investable asset is normally you would have chips that would go down in price. uh H100, Nvidia's chip. We talked about this last year, maybe this was two years ago at this point. People were paying a lot of money for these what would have normally been old ass chips that nobody wanted, but because demand and compute uh demand for compute rather was becoming so high, you saw this, you saw H100 prices start to move higher and a lot of people were saying, "Whoa, what the hell's going on here?" And as this boom continues, there is a very strong case to be made that that compute is now the new commodity and how do you have those things trade? Uh I just want to have Jensen Wong pair that point in the second piece as he was describing it because if you think about it, you can't really have compute become the new commodity without Wall Street buying into that and figuring out how they're going to finance it. So here's how he explains it. >> This is of course also a milestone for our company. We used to build chips that we sell and and these are technology components that people buy and use. >> But now Nvidia's AI factory platform is really an investable asset, an infrastructure asset. And the reason for that is because it's productive, is re revenue generating. It is fungeible. It's used by just about every cloud service provider. It runs every AI model. It runs algorithms of all different types. And so it has really broad deep reach and offtakers. This is a really great opportunity for us to build out the infrastructure, take advantage of an asset that is investable, long life and productive and with the partnerships that we have here, we can support a really broad ecosystem buildout. Now normally people might push back and say look long life and productive not necessarily true because the charts always did look like old chip price go down over time they become depreciated no one wants to use them anymore you get better chips out there but increasingly because demand is so high you get the charts that look like this again basically you would expect them to go down into the right but no not the case still moving up and to the right for old H100s and so the idea of unlocking half a trillion dollars uh to kind of piece together better financing as we're hearing from a lot of uh strategists is not too complicated. Better financing equals better performance among these stocks uh and not just Nvidia itself by the way but all of the other uh people using Nvidia's chips because they can unlock uh better access to those chips and help solve a lot of the problems here. So reasons to be bullish around that and again I will toot our own horn in terms of uh we heard this at the time we heard this a few months ago crypto being ahead of the times not just from Gregosan projects like Akos but also Vlad the founder of lighter uh and big competitor or maybe similar product offering to hyperlquid but these platforms that are allowing people to invest in these things there was already a tokenized H100 index as we heard from Vlad a few months ago. Take a listen to what he told us in his chats with none other than Vitalik leading to a tokenized index for compute. Very much similar to what we just heard from Jensen Wong. Take a listen. Getting back to the point of of seeing all of these markets start to collide. I don't know if it's fair or how you describe it to people who are outside the crypto space in terms of an everything exchange to suddenly have the ability to hedge across all kinds of different events. Not even just being like a trader in the traditional sense. >> That's right. But really kind of starting to change the way people look at markets in general, >> right? Well, one of the things that we, you know, we were talking to Vitalik about this too, right? Like I guess his big idea is like, you know, when can you trade rent on, you know, on on an exchange? I mean, we haven't done that yet, but what we have done is we've added um H100, right? So the compute index, you can actually trade that on lighter, which so you know what that means is like if you're building a fully autonomous agent, you can actually hedge the cost of your own compute on chain. So that's kind of um another aspect to this, right? where it's not just trading everything just you know for kind of to gamble on things but you can actually have these real world markets that are used directly for either let's say like an AI agent or let's say something that like if you're trading if you have strategy that fundamentally trades like AI stocks whether it's something like openai or anthropic or NVIDIA and then you're also using the cost of compute to hedge like there's some really interesting things that open up there >> so there are some interesting things that open up there again not just for Nvidia specifically but also for the broader AI compute index and uh hyperscalers investment all kinds of different things but I think you know the high level takeaway is boom times are not over when it comes to what we are seeing there so uh just wanted to put a little bit of what we heard from Jensen Wong in that announcement in the context of things that we've been hearing for months now on the crypto side of things as AI becomes the new sorry as compute becomes the new oil um and new investable asset if you are to take Jensen Wong at his word again uh maybe some of the other players in the space seeing benefits from the broader AI infrastructure boom coreweave one of those names that we also want to talk about today since we are seeing those shares move significantly higher um a name that we haven't talked too much about on this show but since shares are up let's spotlight them now. Um, and honestly, relative to some of the other names that we talk about on this show, performance not that crazy high in terms of year-to- date performance, up 34%. Let's zoom out and see how we're cooking here. Um, oh yeah, that's because I forgot there's not a lot of time to discuss in the trading history of Coree, but up 20% today uh because of the beat and better performance from Coreweave in this lighting uh the latest earnings report that we got last night. Again, benefiting from a lot of the money coming in from Meta and the Hyperscalers announced a business deal with Anthropic. So, a lot to uh I think be bullish about in terms of again what other players in AI uh are seeing in terms of coreweave and and some of the other names. Interestingly though hasn't been the case for a lot of the um the data center names that have rotated over from Bitcoin mining camp into data centers. It was a tough earnings week last week whether it was Galaxy uh or a few others. Bit deer being another name that was that was pretty hammered. So, it's kind of interesting to see some of those names kind of struggling to tell their story just given the fact that uh they had been performing so well. A lot of those mining names had been pulling it off in their rotations into becoming data center names. But there are limits to I think whether or not the market is willing to go along with that. And I just want to bring up uh Bit Deer's chart, too, because we did see their stock get hit not too long ago, too. So, I don't know. I think it's an ongoing interesting narrative and story that we're going to have to watch here if we do move past what has been a tough correction in the AI boom with some of those other names kind of getting dinged. Um, but for today, investors celebrating the results from Coree. Um, and then lastly, I guess hard shift into big macro uh things to talk about when it comes to inflation, shifting Fed odds uh of a September hike and uh a $500 billion investment into the AI trade. Um into the complete other side of everything in markets, which is Robin Hood memes. Uh maybe we talk a little bit about those things because I don't know. I think it's kind of one of the more fun things to talk about uh when it comes to animal spirits in crypto. That being any sort of excitement in crypto, whether or not we're turning the corner. We talked a lot about this on the Monday show with Katie Stockton and her thoughts around Bitcoin itself turning a corner. But sometimes in crypto you start to see enthusiasm beyond it uh on the risk curve start to turn whether that's assets like Salana or Ethereum but also the trenches. Um and it has been fascinating to watch some of what's happening in uh the trenches as it were for Robin Hood. And I want to give a shout out to another man who was in the Zora trenches with us last year in Average Joe's crypto because he had a a pretty good report out on what's been happening in uh in the Robin Hood ecosystem. Um covering this for for Block Works. I'm just bringing it up now. Um, and really when you look at it, I mean, it's impressive what they've been able to do in such a short period of time. That matters certainly if you are a Robin Hood investor, but I think it matters slightly more if you're trying to play some of the coins in the ecosystem. Um, and we have seen a few of that, a few of those narratives start to pop off, including ones that he has also raised, um, which would be pawns, the Robin Hood launchpad we talked about in one of our newsletters, but then also some of the memes, uh, levered to that launchpad and the broader Robin Hood ecosystem. Just want to bring up Ponz's uh, launchpad here. Only Cointish, by the way, can talk about some of these things on the same show when it comes to the Fed decision and uh Thinking Cat, which is of course one of those leading uh meme coins now through the Pawn's Launchpad and on Robin Hood's chain. And look, look, am I gonna make this call right now, Texas? Am I gonna do it? Am I gonna tell people that I think I'd be bullish thinking cat here? Why? with very sophisticated reasoning. Of course, I've done hours and hours, days and days of strategic research has gone into this to make the call that this cat is thinking as opposed to other cats that are not. And I think that's important to highlight. Uh I think it's important to highlight because this chart is going up. It's going up right now. Uh if if we bring it up, uh I don't know. It's a dumb thing, but I think it's actually kind of one of those differentiators that could matter here just because there's so many goddamn cats, so many cat coins, and we haven't really seen a cat flyer. Never really seen a cat flyer. Um it's always dogs. People love the dogs, but guess what? Sometimes people like cats and cats that think. Um and so this is one I haven't bought this coin. I'll be quite honest with you. This is not one that I've scooped up myself, but the reason why I'm intrigued in all of this is because we continue to see activity on Robin Hood chain. We've certainly talked about this with Johan uh who's leading things at uh Robin Hood crypto. Um but I do think it is interesting to start to think about the launchpad battles because as average Joe's points out, one of the most bullish things that happens for these launchpads is you need to have flyers uh that prove that your ecosystem that you're building has like real traders and real money on the platform. And the best way to do that is to actually have some of the tokens that are happening on the launchpad beat out your own token. Um, and this is what we're hearing from Average Joe saying the most bullish thing for pawns would be thinking cat to flip it in market cap. Um, and so I don't know if I was witnessing this and I was kind of the pawns team which has already kind of made some money through the revenues that we're seeing. If you're trying to get more attention, it is true. You do want to see more flyers kind of start to pop off. Um, and whether or not that's Cash Cat, the other cat out here, or some of the other things. Look, sometimes you just got to follow the money and you got to follow what those what those trades will be um in order to win. And I've seen this enough to know uh sometimes exactly what you think will play out does indeed play out. Sometimes you don't need to overthink it. Sometimes if the cat thinks, the cat brings in the cage. Uh, and so whether it's cash cat or thinking cat, I think it's pretty interesting to see cats all of a sudden having their day in the Robin Hood chain. Um, we're going to leave it there. Maybe we shouldn't go too deep down the trenches, but I do think that it is something to keep an eye on and we'll continue to cover it obviously as well because certainly Robin Hood seeing a huge boost from prediction markets, but uh also seeing the benefits uh on chain that comes from tapping into a distribution network like Robin Hood with all the users that they have uh and what they're offering people right now. Um, we'll see if it if it ends any better than what we've seen on base and for Coinbase's uh move on chain. But for now, we will leave it there. A reminder that you can check out all the huge interviews from around the world of web 3 and Tradfi as well at coinage. Media and you can co-own this experiment with us. The first communityowned media outlet built on chain. We've got much more interviews coming up this week, including a big one with a man who says the government killed his bank, uh, the old founder over at Silvergate. Fascinating discussion, one that I would definitely recommend you checking out, especially as we see clarity get discussed. For now, thanks again for tuning in. For everybody here at Coinage, I'm Zachman signing off. We'll see you again soon.