Subsea Cables & Internet Infrastructure

The Michael Burry view is that companies are depreciating their GPUs over 5 year periods despite technological obsolescence in 18 months or less. This means negative profits and rates of return despite corporate claims to the contrary.  But heat stress also depreciates GPUs. AI Chips run marathon sessions during model estimation (training) often exceeding a month and GPUs often fail due to heat stress: "Imagine you had a 10,000 or even a 20,000 GPU data center. You should expect on the statistics a chip to fail about every 3 or 4 hours. So long before I get to the point where I’m rapidly turning these over because there’s a new generation of chips, I’m turning over a vast chunk of my chips just because they’re failing under thermal stress." Source: https://paulkrugman.substack.com/p/talking-with-paul-kedrosky. GPUs used to estimate large language models are like ultra-marathon (50, 100, and 166 kilometers) runners on a 38 degree day.  It took Facebook 54 days to estimate the ...

According to FCC filings Starlink shut down almost 500 Starlink satellites during the first half of 2025. The company had them reenter the atmosphere where they burned up. What is striking is that these satellites were all less than 5 years old. The general consensus is that LEOs have a life expectancy ranging from 5 to 8 years. Shorter than expected life spans for the satellites will hit Starlink's income statement hard by increasing network depreciation and replacement needs. However, Starlink has managed to lower its LEO's manufacturing costs down to $500K versus initial figures around $1 million. So these production economies of scale might offset some of the higher than expected depreciation. However, there are also rocket launch costs as well. It costs Starlink about $3 million to put a satellite into orbit. The Falcon 9 costs $67 million per flight and delivers 23 LEOs into low Earth orbit. As a private company Starlink financials are a bit of mystery. The company press ...