TIP848: Meta (META): What the Market Misses? w/ Daniel Mahncke & Shawn O'Malley

There's so much going on that it's difficult to even know where to start today, Daniel.

Perhaps we go with what has changed since our first episode in January on Meta, and some of the most notable things have probably been Meta announcing that it would build a cloud business, more or less, and that there is, or better said, was a major lawsuit hanging over Meta's head.

Yeah, I think it was safe to say there was no shortage of news, unsurprisingly, whenever it comes to Meta.

And just for context, in January of this year, Mark Zuckerberg announced on Threads, which is sort of their equivalent to Twitter or X, that Meta wants to build out AI infrastructure at scale.

And he talked about building tens of gigawatts of data center capacity this decade, which means hundreds of gigawatts or more over time, so thinking the next couple of decades.

And just for context, a single gigawatt is roughly the output of a nuclear reactor, so we're talking about quite a lot of energy here.

And for that project, he even brought in Dina Powell McCormick, who is a former government official, and she's sort of working as the president and vice chairman on that project, explicitly there for just working on government partnerships and to finance the build-out of these data centers.

It's a fascinating hire, I think, in itself.

When your CapEx plans are so big that you need someone whose sole job is essentially to do diplomacy with the federal government, then you know you're making some serious capital allocations.

And having that political support at this moment, though, is pretty important optically.

Virginia is the data center capital of the country, if not the world, probably, and so I have been seeing data centers popping up my entire life since I was a kid.

But I don't really remember them ever being controversial until recently.

And so we actually had a family member with some land that, for years, they were going back and forth with the courts to try and win approval for a massive data center to be built on that property, and that deal just fell through recently.

So the sentiment changes in AI are creating real obstacles for big tech companies that are manifesting as legal opposition, for example.

And so I was looking at a Pew survey on this recently and, and about half of all Americans say they're more nervous about AI than excited about it, while forty percent say they're equally excited and concerned, and then only ten percent say they're more excited than concerned.

So that is not exactly a ringing endorsement of the national popularity of AI.

And all of that in a country that is usually more AI or tech first than any other country on the planet.

So I think it says something about just the general thought of, you know, people on this matter.

And of course, it also comes from the fact that for a long time, AI companies were basically telling you, "We're coming for your jobs." I think that doesn't help, especially in America.

And I recently talked to a member of our mastermind community, and he told me some, let's say, fascinating stories.

He used to work in the White House, and now he basically runs a consulting business where, among other companies, Meta would go to seek help when it needs connections to politicians for future projects, which is pretty much exactly what's happening right now.

And from what I gathered, I think Meta is not very good at, let's say, understanding how Washington works.

I definitely hope they will do a better job this time because considering the CapEx announcements, it would be good if they didn't mess up this project and this new sort of regulation.

I think the project that I discussed back then was about a decade ago, Meta trying to position a stablecoin, which didn't work out back then but has since become a huge thing.

So if they would've just played their cards better, this could've been a huge thing for Meta very early on.