00:00The entire call was about Google Cloud and TPUs, not even one question on the core ad search business,
00:08which is surprising, you know, given how the calls used to be.
00:12But look, they talked about how supply constraints remain when it comes to AI data center capacity.
00:20They're actually renting data center compute from third-party providers despite all this CapEx.
00:28Who wants more compute than at Google, for example?
00:29Yeah, but they want more.
00:31Because right now, anybody who was early to invest in power and computing and data center capacity is looking like
00:43a genius.
00:43Who are those people?
00:44All of these hyperscalers.
00:46So Google's renting space from?
00:48From SpaceX, potentially Meta.
00:51Again, they didn't specify.
00:53But Meta has data centers to spare?
00:55Like, that's what I don't understand.
00:56Yes, they don't have a model which is comparable to an Enthropic or Gemini.
01:02And so right now, they are following the SpaceX playbook, which is if you rent your one gigawatt compute,
01:09you can generate up to $20 billion in rental revenue just by renting the compute, nothing else.
01:14By being a landlord.
01:15By being a landlord for your compute, yeah.
01:17At what point is investing in all this too much?
01:21I mean, right now, investors have been following this guideline of as long as I see a return on this,
01:26as long as it's paying off.
01:28But at some point, is it just too much and investors will balk?
01:30I think so.
01:31We will hit that point.
01:32But Google also said they will be significantly raising their compute for 2027.
01:39So they raised their full year guide for 26 by about $10, $15 billion at the midpoint.
01:45And then they said 2027 would be a significant increase.
01:49Now, my interpretation of significant is it's at least 50% because this year it was 100%.
01:54Wow.
01:55Their capex doubled in 2026.
01:5850% increase equals significant increase.
02:01At least in my book, yes.
02:03So it's not changing anytime soon to your question.
02:07All right.
02:07So I'm looking at the FA function on the Bloomberg terminal, folks, which gives you a financial analysis.
02:13That's what it stands for.
02:14CapEx for this company, Google, in 2022, CapEx was $30 billion.
02:21In 2026, expected to be almost, I'll call it $190 billion, going to $280 next year.
02:28There ain't no free cash flow left for this company, which was a free cash flow juggernaut.
02:32Yeah, they were negative free cash flow even for this quarter.
02:35First time ever, right?
02:36First time ever.
02:38So, and they just did an equity raise, $85 billion.
02:41So, and the justification is we will invest significantly in training our own model, Gemini 4.
02:50And, you know, the cloud business really is super strong.
02:54So 82% growth when you have a $100 billion business, it's like show me any other company
03:00that's growing 80% at $100 billion run rate.
03:04Okay.
03:04Okay.
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