Rocket Terminal

🚨 CATHIE WOOD ON A POTENTIAL TESLA–SPACEX MERGER Cathie Wood says China could be the biggest geopolitical obstacle to Elon Musk combining $TSLA and $SPCX. Her view: Musk is balancing relationships with both Trump and Xi while navigating Tesla’s major presence in China and SpaceX’s role as a U.S. defense contractor. A Tesla–SpaceX merger would have major geopolitical implications. 🇺🇸🇨🇳 Would regulators allow it?

The AI capex race has created a massive spending divide among Big Tech. Since Q1 2023, Alphabet $GOOGL, Microsoft $MSFT, Amazon $AMZN and Meta $META have increased capital spending by 5–8x, according to a16z. Apple $AAPL has gone in the opposite direction, cutting capital spending by 20%. The contrast highlights just how aggressively the hyperscalers are investing in AI infrastructure while Apple takes a different approach.

David Sacks sees a potential data center construction bottleneck emerging in 2028. His base case: • Fully permitted data center projects get built through 2027. • New projects face growing obstacles as permitting becomes increasingly difficult. • Political opposition could discourage officials from approving new developments. Sacks argues that opposition to data centers from both Democrats and Republicans creates little political incentive for officials to approve new projects. His biggest concern: 2028. AI infrastructure spending could remain strong through 2027, but a slowdown in new data center approvals could put future hyperscaler capex at risk. The question is whether permitting becomes the next major bottleneck for AI infrastructure.

Ron Baron has nearly HALF of his flagship fund invested in two Elon Musk companies. Here’s the breakdown of his $15.6B Baron Partners Fund: • $SPCX: 32.6% • $TSLA: 13.4% • $SHOP: 5.2% That’s 46% combined exposure to SpaceX and Tesla. The fund holds 24 stocks, with Charles Schwab $SCHW, MSCI $MSCI, Hyatt $H and Spotify $SPOT rounding out the top seven. Baron’s portfolio makes one thing clear: he’s making a massive bet on Elon Musk’s companies.

Taiwan is stepping in to stabilize its stock market after the TAIEX suffered its worst week since 2001. Starting Monday, Taiwan will impose emergency short-selling restrictions and stands ready to deploy a $15 BILLION stabilization fund. Key measures: • Cut intraday short-selling limits from 30% to 3% of 30-day average trading volume. • Raise minimum margin requirements from 90% to 130%. The selloff has been severe: • TAIEX plunged 9% intraday Friday, briefly falling below 40,000 and entering bear-market territory. • TSMC $TSM fell 4.46% in Taiwan. • Foreign investors have sold more than $45B in Taiwanese stocks net this quarter, per Bloomberg. Meanwhile, TSMC’s fundamentals remain strong, with revenue up 41% to $47B and gross margin reaching 66%. Its U.S.-listed shares rebounded 6.33% Friday to $375.44 amid news of the restrictions. A sharp disconnect between AI-driven fundamentals and investor sentiment.

The AI layoff gamble may be backfiring. Companies that rushed to replace workers with AI are now dealing with the consequences, per The Guardian. • Meta scaled back plans to cut staff and expand AI agents after employees spent more time fixing technical and security errors. It’s now rehiring managers. • Microsoft and McKinsey are limiting employee AI use as costs mount. • Walmart workers say AI scheduling and task tools create unrealistic expectations and false alerts. The productivity payoff remains elusive: 90% of executives say AI has not yet boosted productivity at their companies, per an Atlanta Fed working paper. Meanwhile, more than 112,000 U.S. job cuts this year have been attributed to AI, according to Challenger, Gray & Christmas. The question is whether companies are replacing workers faster than AI can actually replace the work.

The U.S. Treasury plans to buy back up to $95 BILLION of its own debt over the next 3 months. Breakdown: • $70B for older Treasuries to improve market liquidity. • $25B in short-term Treasuries to manage cash balances. Improved Treasury market liquidity could provide an indirect tailwind for stocks and crypto by supporting smoother market functioning and financial conditions.

$SPCX could exit 2026 with $77B in annual recurring revenue from contracted AI compute deals, according to Deutsche Bank. The estimates include: 893K $NVDA GPUs 1.6 GW of compute capacity ~$11B in annual revenue from $GOOGL alone That’s before factoring in Starlink and rocket launches, making Elon Musk’s $100B December revenue target look increasingly achievable. GPU pricing is another key factor: GB300s are estimated to command ~$13/hour versus ~$3.50/hour for H100s. That pricing gap matters for $IREN and $NBIS as they bring GB300 capacity online, while highlighting why GPU generation will be critical for $CRWV when contracts come up for renewal.

CoreWeave $CRWV says it sent a letter to Texas Governor-elect Gina Hinojosa today.

CHAMATH: ELON MUSK COULD MAKE SPACEX THE KING OF AI COMPUTE Chamath says SpaceX and Anthropic’s compute agreement has a mutual 90-day termination clause, and Musk exercising it could dramatically reshape the AI infrastructure market. His argument: • Anthropic relies on a disproportionate share of the compute covered by the deal. • SpaceX could potentially reprice that capacity at 2–3x current market rates. • Anthropic would have limited alternatives and could be forced to accept higher pricing. • Other hyperscalers would face pressure to reassess whether to prioritize internal compute or sell capacity externally. • Neoclouds could be forced to accelerate infrastructure spending to avoid falling behind. Chamath believes the decision comes down to one question: Does Elon walk away from the deal? If he does, the economics of AI compute could change dramatically.

US PRODUCTIVITY GROWTH JUST HIT A 1-YEAR HIGH Nonfarm labor productivity surged at a 3.5% annualized rate in Q3 2026, its strongest increase since Q3 2025 and the third consecutive quarterly improvement. Other notable figures: • Nonfarm business output: +3.7%, strongest since Q3 2025. • Hourly compensation: +2.9%. • Unit labor costs: -0.7%, the first quarterly decline since Q2 2025. Productivity is growing faster than labor costs, meaning companies are producing more while spending less per unit of output. Heavy investment in AI, software and equipment is increasingly focused on improving efficiency and expanding output. The AI-driven productivity boom may be starting to show up in the economic data.