NEWSMAX

Cloud is. Is closer to one, but anyways, I'm interested to see. I imagine they'll have to come out with their own kind of news around this pretty quickly so that they're not sitting in limbo with just one kind of rumored article floating out there. And people are speculating. Ju Khan is saying Meta falls out of the air race. He's over at Citrini as well. Too soon to say that probably. They still have a bunch of amazing talent. They certainly have a lot of GPUs. And you know, Elon getting into the cloud business, certainly he was not seeding the AI race. Right. I think he seemingly is as motivated as ever to. To do what he can to win or at least be a player. It's just. It's almost like the curse of size or something. Like when you're a trillion dollar company, there's probably a world that the Meta Ray Ban display is a good example of like or Meta Ray Bans. Good example of like. There's probably a piece of consumer hardware that's AI enabled, like the Ring or something where. Or just getting really good at voice models or just getting really good at image models. And if they're a little bit more narrow and constrained, they could probably completely dominate that. But trying to do superintelligence and, and coding agents and it's a little. It's a little scattered potentially. Serenity says there's a lot of disinformation going around about Meta cutting capex because they quote overbuilt. This is an if they have excess capacity. And it looks like the opposite right now. Hyperscalers like Google are so much are so compute constrained that they have had to cut allocations to Meta. Back in March, since Meta was using too much for internal projects, Meta was immediately constrained. So it looks like they were forced to immediately sign massive $48 billion contracts with Neo clouds like Core Weave and Nebias. Meta is selling excess capacity if there's any, especially since their large contracts are take or pay from the new Neo clouds. Yeah, this all could just be like a potential. Like you're laying the groundwork in case you wind up in a situation where that is where the value is accruing. That's where the advantage for Meta is. So there certainly is a positive thesis there. Jae Yoon says we are still massively short compute. Meta and XAI are selling compute because there's no inference demand for their models. It's a compute allocation problem. Too much compute in the hands of players with no internal use for it. Not a compute surplus problem. Interesting. Well, we can continue.

So our first guest will be joining in 30 minutes and we'll take you through the news. Meta is selling compute. They're getting out of the computing business. They said we don't need computers anymore to do what we need to do. We don't need them, we're going to be selling them. Meta Platforms is developing plans for a cloud infrastructure business to sell access to AI computing power and models. Competing with industry leaders like AWS and gcp, the company is considering selling access to various AI models hosted on its existing AI infrastructure as well as raw computing capacity as part of its Meta Compute initiative. Meta plans to generate revenue from excessive computing power could help return its investment in AI infrastructure, which includes hundreds of billions of dollars spent on data centers and expensive chips. And so lots of reactions to this. The Neo cloud market is selling off, oddly enough. Meta has a bunch of NEO cloud contracts. Some of those companies are sell because now they're a buyer and also a competitor. Lots of different takes about, you know, Meta finding its footing, finding something that justifies the massive capex. Of course it's deeply confusing, John. Yeah. Is it? I mean the whole thing. The whole thing. What's confusing? I think that, I think it is practical what they're doing. Yeah, but it shouldn't, it doesn't. As somebody that, that, you know, I would say overall has been a big, you know, cheerleader for Meta, I think it's really the best in, in my view it is a perfect business. It doesn't give you a lot of confidence in like the strategy overall. They're signing these Neo cloud deals worth tens of billions of dollars. They're built, you know, spending hundreds of billions of dollars and yeah, they can make the argument that these type of like doing any type of Neo cloud deals themselves is just good business. It's just like how it's just the best way to get ROI today. It doesn't give you a lot of confidence that there's near term products on the horizon for Meta that are going to be able to utilize that capacity themselves, which is clearly been their strategy. Mark and the team have never, have never said we want to be in the cloud business. They've talked about, yeah, they've talked about the possibility of it but the stated goal of MSL is personal superintelligence. We don't know which I was a fan of and I think you were a huge fan of. You were like Manus on your phone going around your social networks. That's my biggest bull case for all of this. Like it's very There are so many different applications that I can imagine being a daily driver of in the Meta family of apps. Oddly, none of that has really been even tried, in my opinion. It feels like a little bit. Yeah. All we've seen so far is Muse Spark good on benchmarks, like decent, you know, like. But. But again, not anything to that that anyone should really get that excited about as a, you know, as a. As an API provider. Exactly. They did announce that they were going to release it via an API. I don't think they have. They might still. It's a model. It's a good model, sir, but I don't think it will have a lot of demand. Yeah, and then we've seen Meta Vibes, which was a mid journey wrapper. But the fact, even if Muse Spark is not on the super giga frontier, can it be good enough to get some work done inside Meta family of apps like it should? I would imagine, yes, but they just haven't found that killer feature. There are plenty of. There are plenty of applications that are AI powered. There are plenty of models out there that have found their footing without being on the super intelligence path or on that particular curve. Yeah, and it's interesting because yesterday we were talking about the story where Google had been telling Meta.