00:00According to Terry Duffy at the CME, computes the new oil.
00:03That's right. It's just another commodity that is going to be able to not just be traded,
00:08tracked versus that's really what was the first pillar was the index that was created.
00:13Silicon data bringing that to investors so they could at least start to have more transparency
00:19around putting a number to what people were valuing as the price of compute technology.
00:26And now we have the ability to hedge to hedge against price moves and some of the risks that are
00:34out there
00:35as it would you tracking oil or other commodity prices.
00:39This is really bringing this into the institutional space.
00:42And you're going to have both the tech firms and investors that are going to jump into this
00:47and build the market and grow it so that it has the actual liquidity to back it.
00:52Catherine, I'd go even more basic than that.
00:54You know, futures contracts are just an agreement to buy or sell something at a later date at a fixed
01:01price.
01:01So you're either locking in that cost or you're betting in a price change in either direction.
01:06But like with compute, like I think we're talking about GPUs or GPU hours, something like that.
01:12You know, have they worked out how this would work in the real world?
01:15That's right.
01:16Right. So the index is is where you're getting into that detail about GPUs and the processing power.
01:23That was kind of the first step.
01:25Now, with the futures contracts, as you are pointing out, this is the ability to hedge for future moves,
01:33putting a price to or really the bet of where these contracts are going to be traded in the future.
01:42So it's both looking at where is the price of these GPU processing power trading today and where do we
01:50see it in the few weeks, months.
01:53And as it builds out, it's really going to be it has to develop.
01:58And I think that it's something that also needs the blessing of regulators.
02:02But that is the the intent is to to be able to put a price on not just where this
02:09power is trading at the very moment, but in the future.
02:13Silicon data commonly, who's the founder of all this, previously a trader,
02:18was her idea to bring transparency to those who were going and trying to buy compute and just understand what
02:23one offering was like to another.
02:25Or she really thinking that this could become a fully fledged asset class that the retail investors want to get
02:29in.
02:30And more broadly, we want to sort of build up an ecosystem around.
02:33I do think it was all about the ecosystem.
02:34What silicon data and what Carmen was building from the very start was, again, one pillar to something that was
02:41much larger.
02:42And when we talk about transparency before today, there really wasn't a big player like CME that was able to
02:50bring compute as an asset class to the market in this way.
02:55CME as a derivatives exchange, they already have the traders.
03:00And so you might not have just the tech firms and the AI providers, the super scalers that are going
03:08to be using this to hedge their own costs.
03:11But you're bringing an entire new institutional base that is going to look at this asset class in the same
03:18way that they would oil, metals and other things that they trade.
03:21So it's going to be kind of a mix of many different worlds that is going to build this ecosystem,
03:27this new market.
03:28That was my next question, really, is like put CME in the context of the broader derivatives markets.
03:33The next step would be, I guess, other players would make similar proposals for futures contracts on computes in other
03:40jurisdictions.
03:41Yes, you already have seen some exchanges, some upstarts, but no one to the size of CME, which is the
03:48largest U.S. derivatives exchange, come into this space.
03:52It's very likely that we'll see other large exchange operators that will jump into this and build their own marketplace.
03:59Because it's all about the more liquidity, the more trading and the more interest that you can build, the better
04:05it is for the market as a whole.
04:06It doesn't need to be just one exchange.
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