Subsea Cables & Internet Infrastructure

Coreweave is a startup AI Data center play. It makes Oracle look downright healthy and athletic. While Oracle's legacy software business generates a lot of cash flow, Coreweave totally depends on external financing in the form of stock sales and debt. Moreover, Coreweave has exactly the same problem as Oracle, namely high customer risk. Coreweave's main clients are Microsoft, META, and OpenAI. Now Coreweave claims to have a $100 billion backlog. But the Devil is in the Details. No contract is valid if Coreweave cannot deliver power, GPUs, and space to fulfill them. And that is exactly the probem. Demand vastly exceeds supply with no relief in sight for years to come. Secondly, it is likely that OpenAI and Anthropic are issuing more compute requests than they actually need given their soft commitment contracts. So if you add up the backlog across all customers, it probably vastly exceeds real demand.  These key fundamental factors are the same as in the case of Oracle. An AI da...

It is not a coincidence. Starlink needs terrestrial connectivity just like any other ISP. Mombasa is the single most important East African coast subsea hub with Djibouti in second place. Notice that Starlink placed its transmitter dishes on platforms to achieve the 20 degree from horizon visibility required for their network.

The chart shows US business paid AI subscription growth. Musk's AI company is in last place. He shoved xAI into SpaceX in order to siphon off SpaceX cash flow and IPO proceeds to finance his struggling venture. On its own, no one would lend to xAI given its third tier position in the AI service and its $1 billion per month cash burn. Now Anthropic is leasing a huge chunk of xAI data center capacity to estimate its models. Supposedly worth about $1.25 billion per month. I say supposedly because contracts can vary from rock solid to as soft as jello. Indeed, some industry contracts are really just letters of intent, non-binding expressions of customer interest. In this case both sides can cancel the agreement with only 90 days notice. Again, the Musk cheerleaders are prematurely celebrating. What this deal implies is that there's very little demand for xAI's models. So just as X pivoted from social media platform to AI, it is now pivoting to the AI data center b...

Tiktok is investing $25 billion in a Thai data center. They recently purchased over 4 terabits of Layer 1 capacity into Bangkok causing prices to skyrocket. I have located some spare capacity at the 10G and 100G level.   Appetizer ...  A point: Songkhla Cable Landing Station. Z point: SG1, Singapore.  Two diversely routed 10G waves.  Term: 3 years.  MRC per wave: $8.5K.