00:00Rob Nice is the founding partner of H-Tree Capital, a London-based technology venture capital firm.
00:06Always good to have you on Global Business Europe.
00:08So why does the world's most valuable company need this kind of help?
00:14Look, I think in this market, you know, capital is everything.
00:17Raising capital to build these data centers, to build these hyperscalers, is absolutely essential.
00:21And for NVIDIA, it's a way of raising capital in a non-dilutive way.
00:24So it doesn't dilute their value, it gives them additional pockets of capital,
00:27and they're really trying to reshape the narrative to get even more capital in beside the debt markets
00:31to get actual investable capital in from things like pensions.
00:35Well, critics call this circular financing, NVIDIA helping fund the very companies that buy its chips.
00:42Is that a sign of strength in the ecosystem or a warning sign?
00:47I think it's a warning sign. It creates moral hazard when you're marking up your own deals one after another
00:52and you're the beneficiary. It creates an artificial loop of what is the actual valuation
00:56without any external pricing. It sort of becomes magical money.
01:00So I think it is a worrisome thing when you see these things going in circles.
01:04Now, this isn't just Wall Street's own money.
01:07I mean, we're talking about these six big banks and investors.
01:10It's pensions, it's insurance funds too.
01:13If this bet doesn't pay off, who actually carries the risk?
01:18Well, I think it's getting shifted around and what he's trying to do is, you know,
01:21shift the definition of risk from things like debt that are inherently more risky
01:25to now shifting it more to an asset class so things like pensions,
01:28which normally are quite conservative, get access to things that are actually more risky.
01:32So it's a way of mixing the labels a bit and trying to double dip in a way
01:35and get high-quality debt at a high-quality asset rate.
01:40Now, Corweave, Supermicro, they report after the bell tonight.
01:44You know, both sit right in the middle of this infrastructure spending story.
01:48What would have missed from either of those tell us that NVIDIA's $500 billion number can't?
01:55I think the question, at what point does the demand start to slow down?
01:59Do we reach a point with the frontier models where the demand isn't quite so high?
02:02Right now, there's almost insatiable demand.
02:04At some point, we probably do hit a plateau where the demand starts to decline
02:08or at least flatten out.
02:09I think companies like Supermicro have already pretty briefed
02:12that the numbers are going to be good this quarter and up.
02:14But there's certainly, you know, early indicators we're looking out for
02:17to see are these things actually going to flatten out.
02:19Is it going to be a litmus test of whether this big push
02:23in terms of AI infrastructure spending is the right move?
02:27Because it's going to be a long time before we see these companies making the revenue, right?
02:32Yeah, I think, again, it's an arms race you're seeing right now.
02:35Companies like Google raised $10 billion from Berkshire Hathaway and others.
02:39You're seeing this big, you know, defensible moat trying to be built
02:42that we think will be a generational-level defensibility asset.
02:45So in this case, I think this is one of many things we'll see going on
02:49to build these intense amounts of compute power
02:51with a concept that those with the most compute power will win eventually.
02:56Rob Nice from HG Capital.
02:58Thank you very much.
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