Surely, you’ve heard the biggest news story of this morning by now:
The moment I saw this, I knew precisely what it meant: the first major crack in the AI Hyperscaling story had appeared.
Now, META is chirping this new revenue opportunity as great news, and the market certainly seems to be agreeing:
As I read it, however, it is a tacit admission that Meta’s AI ambitions are a flop, and they are forced to sell off access to the exceptionally expensive AI infrastructure that’s going to otherwise lay fallow.
It’s a much bigger deal than you might think.
Coincident with this news is that SpaceX (SPCX) is getting hammered, for the simple reason that their only meaningful AI revenue is coming from the exact same admission: that is, selling access to their overbuilt AI infrastructure to what are, frankly, competitors to Grok.
The /ES, /RTY, and /YM are all bright green right now, but under the surface, the cracks are starting to appear, which is why my tech-heavy short portfolio is doing so well.
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