Q: I read the following on Nate's substack: "The largest debt-funded infrastructure buildout in history has an unpriced dependency on a noble gas.
The five largest US cloud and AI infrastructure providers have committed to spending between $600 billion and $700 billion on capital expenditure this year. Seventy-five percent of it is AI infrastructure. Google’s co-founders Larry Page and Sergey Brin have reportedly said they’d rather go bankrupt than lose the AI race. Goldman Sachs projects total hyperscaler capex from 2025 through 2027 will reach $1.15 trillion. Every dollar of that spending assumes the chips arrive on schedule. The chips come from fabs in South Korea and Taiwan. Those fabs require helium to operate their lithography machines, cool their wafers, and detect leaks in their vacuum chambers. There is no substitute for helium in any of these processes.
A third of the world’s helium supply came from a single industrial complex in Qatar. That complex was hit by Iranian missiles three weeks ago. It is offline. Parts of it are destroyed. The strait through which its output ships is closed. And the specialized containers that carry liquid helium vaporize their contents within 48 days. The clock is already running."
Do you buy the argument that is being made by Nate about a very significant impact from a lack of helium? Do you think the impact has already been priced into the market? What would you suggest an investor do if he is invested in the affected mag 7 stocks?
Thanks.
The five largest US cloud and AI infrastructure providers have committed to spending between $600 billion and $700 billion on capital expenditure this year. Seventy-five percent of it is AI infrastructure. Google’s co-founders Larry Page and Sergey Brin have reportedly said they’d rather go bankrupt than lose the AI race. Goldman Sachs projects total hyperscaler capex from 2025 through 2027 will reach $1.15 trillion. Every dollar of that spending assumes the chips arrive on schedule. The chips come from fabs in South Korea and Taiwan. Those fabs require helium to operate their lithography machines, cool their wafers, and detect leaks in their vacuum chambers. There is no substitute for helium in any of these processes.
A third of the world’s helium supply came from a single industrial complex in Qatar. That complex was hit by Iranian missiles three weeks ago. It is offline. Parts of it are destroyed. The strait through which its output ships is closed. And the specialized containers that carry liquid helium vaporize their contents within 48 days. The clock is already running."
Do you buy the argument that is being made by Nate about a very significant impact from a lack of helium? Do you think the impact has already been priced into the market? What would you suggest an investor do if he is invested in the affected mag 7 stocks?
Thanks.
