00:00 Speaker A
However, there are real differences between the planets here. There’s a Mount Rushmore of corporate credit, and it’s a real giant hyperscaler. It’s the Microsofts, the Metas, the Amazons, the Alphabets, as distinguished from the triple-B names like the SpaceXs of the world and the Oracles of the world, and of course from the high-revenue names like the CoreWeaves. This means that the costs of building a network, including borrowing capacity, growth capacity, and financing costs, vary. Hmm, I think SpaceX is an outlier. I think SpaceX’s upside is as high as any other company, but it will be more difficult to run because they are so small and don’t have a traditional business to support their growth plans.
01:03 Speaker B
For example, Alphabet issued a 100-year bond. in pounds, issued in British pounds. Will we see more creativity and unusualness or other currency-type products?
01:21 Speaker A
Yes, that’s a great point. In terms of creativity and diversity, you can’t do everything in the unsecured debt market. It’s possible, but it will cost more. What you’re seeing is, as you said, an alternative currency. There are big bids for AI exposure outside the U.S., and there aren’t many ways to get it outside of these U.S. companies. So if you issue in Canadian dollars, euros, Swiss francs, British pounds, you can do that on an outcurve. Alphabet’s 100-year bond is like planting a flag in the ground and telling the world that you don’t have to worry about your balance sheet because you can borrow for 100 years and no one will. But we’ll see other types of deals that raise funds as well. You will see a significant number of private transactions. Um, uh, you know, all these special purpose vehicles are effectively assets, uh, reverse transfers, uh, they’re raising tens of billions of dollars and they’re at the data center level. They basically act as anchor tenants for hyperscalers. This contributed to the diversification of funding. And one more thing, when you mentioned SpaceX, don’t forget they did an $85 billion IPO, so they raised equity. Alphabet also plans to issue $85 billion in stock this year. I think there is a possibility that the company will issue more shares than other companies. So when you do things like converts and civilians, unsecured, dollars and non-dollars, the answer to all of these is yes. The amount of spending we are seeing today is only going to increase, and will continue to increase significantly. That means there will be trillions of dollars in capital investment over the next few years, and it will be built primarily on support from bondholders.
