Fluidstack

National Economic Council Director Kevin Hassett told Bloomberg Television if this month's inflation data come in hot, he would expect the Fed to raise interest rates in December.

Situational awareness is raising money from investors to plow into neocloud startup Fluidstack.

This comes just three months after highly leveraged bets on AI firms nearly led to the hedge fund's implosion.

A source tells Bloomberg News the Leopold Aschenbrenner Fund is pitching clients in a fundraising round that would value fluid stack at $40 billion.

Now, look at what that looks like at scale.

We've got Fluidstack.

It's a company running AI infrastructure at the gigawatt level.

They're hiring one person to do it.

Cypher, just under half the amount there, $11.4 billion, but with plenty more sites in there.

and their bailiwick to fit out and energize in the forthcoming years with Amazon and Fluidstack taking up the contracts with that particular company.

But yeah, I thought it was an interesting slide to highlight this, but you can clearly see Nvidia certainly looking for a stake in every company that they actually have dealings with.

And when you see the amount of free cash flow that they're driving, they're putting it all to good use because they can see the benefit of how these companies will be, not just now, but what they look like in sort of three or four years' time.

And you guys need to look at us for what we're actually offering.

Yeah, absolutely.

I mean, the deals that Terrell have got, we've highlighted Anthropic 19 billion and Fluidstack 6.7 billion, with Google backstopping 3.2 billion of Fluidstack's rent and also owning 14% of the company in terms of shares and warrants.

Now, Paul's been very clear to say that contracts require customers to be investment grade or bring investment grade credit support, which is how the company's financing projects competitively.

We talked about the deal that TerraWolf have with Vodafone.

Google supporting FluidStack, and we also talk about the Microsoft deal that Iron have got there.

They open doors in getting, you know, effectively cheaper rates there.

If you haven't got those type of companies supporting you, then the doors will open, but they'll open at a higher rate there.

Now...

This would end up costing Cypher a lot more money, but they do have a clause in here that stipulates that Cypher will absorb the first $359 million of cost overruns above the original construction budget, after which point Fluidstack will reimburse 50% of additional overruns over the life of the lease.

And per that investor presentation that we covered during the segment, Cypher anticipates that the cost overruns that they will specifically burden after reimbursements will run them roughly $375 to $400 million.

So not as bad as what it is ultimately going to cost for them.

The gross cost for the overhaul will be much more, but they do have a little bit of financial cushion from Fluidstack for some of those overruns.

I mean, if you're bullish on some of the core fundamentals, then you look at this as, great, another buying opportunity.

Maybe it's kind of like when Leopold Aschenbrenner tanked the entire neocloud market.

Google's backstop doesn't start until construction is complete.

Deal documents contemplate a disagreement about whether it's been triggered at all, and a six-month delay would let the tenant, AI company Fluidstack, walk away.

Meta's $28 billion Louisiana complex, CoreWeave's GPU-backed loans, and Oracle's off-balance sheet lease obligations get a similar legal dissection.

Insolvency cascades are set off by depreciating GPUs, collateral food fights and margin calls ensue, Quinn Emanuel is a litigation boutique, so it's talking its book here, but business development brochures were never such grim reading.

Albeit, you see over the likes of CoreWeave getting into bed with Core Scientific today, or...

Cypher Mining, Google took a 6% position in Cypher Mining in order for them to unlock debt financing to get the co-location built for Fluidstack.

So it's becoming more of an accepted practice today, but go back eight years ago and you were thought of as an utter cowboy of wanting to host this in a former crypto mining site.

I even look back at how we done things back then.