Ash | Carry

The AI infra paradox : Rising Rentals and Rising Cost of Debt. Since summer, renting GPUs has gotten 33% more expensive. H100, a 2022 chip, rents for $3.99/hr, up from $2.99. During the same period, the cost of insuring CoreWeave's debt went from 452 to 1,148 bps. And it's not just CoreWeave. 5-year Credit Default Swap (CDS) spread (Credit Insurance Premium) since summer of 2026: • SpaceX 110 → 226 • Oracle 215 → 322 • Meta 90 → 108 • Nvidia 82 → 101 Ideally, rising unit revenue soothes the lenders' concerns resulting into better cost of capital. Then what explains this divergence where lenders are pricing distress though renters keep paying more? It's about pricing scarcity today (rising rental) vs. certainly of cash flow after 5 years when new chips land (Rising default insurance). Further, the GPU Operators also sold capacity forward at fixed prices to get finance. So most of today's price spike isn't accruing to them, but the rising interest cost is. This creates shrinking margin that further pushes the cost of debt up. Commodity markets fixed this with benchmarks and forward curves: lock the price, finance against hedged revenue. Compute and inference will need the same otherwise the ABS lending model backed by long term contracts will keep hurting the AI companies.

While USA’s AI rally does not appear to pause anytime soon, China’s AI index is now negative for the year 2026. YTD : -18% Fall from top : -36%

This is the numero uno indicator of where inference market is going. The number of customers paying >100K to Anthropic went up from 20 to 12,000 in less than 2 years. What happens when this number shoots to 12,000,000.

Narrative Violation. Compute margins are expanding, not compressing. Source : Anthropic S1

Memory ETFs not only lost the bullish momentum but are also facing outflow pressures now as prices keep moving lower. From $40 to $81 in 3 months and back to $47 in next 3. What a ride!

Sentience or human brain like performance may not be really coming anytime soon, despite AI industry's warning calls. A chart of efficiency and performance divergence between biological systems and artificial models as scale increases.

When are we getting back our eggs and butter futures?

Crypto can take a breather. Ms. Warren has a new enemy now and it’s called Mayo.

A retail customer facing job is the toughest in the world. And is the least paying one. Hats off to the people who do it without complaining.

Return to fundamentals.