cgtheoret (@cgtheoret) header
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Founder and CEO of X Machina AI, astrophysicist turned entrepreneur, previously founded Nexalogy

Joined November 2008
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cgtheoret retweeted
Giant cash machines like Meta and Google are now negative cash flow; OpenAI and Anthropic have been from the start.* (*With the arguable exception of one anomalous quarter with a big subsidy.) There is at least an 80% chance that this will turn out to be the greatest capital misallocation in history.
META may be new to the negative cash flow club, but not GOOGL: free cash flow was negative for a second straight quarter, -$9.1bn vs -$3.5bn consensus. Trailing-12-month FCF collapsed 73% to $19.7bn, from $73.6bn a year ago.
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I’m proud to be part of the @MIGSinstitute board to to support this important initiative. We need more thought pieces like this:
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Services!
Worldwide spending on AI is projected to reach ~$2.7T this year. Yet, only ~1% of it is expected to go to the models themselves.
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cgtheoret retweeted
Coreweave CEO Michael Intrator says the market is acting irrationally by selling his stock. A run through SEC filings reveals Michael Intrator has been “acting irrationally” as well, selling $907 million worth of $CRWV shares this year alone. His cofounders Brian Venturo and Brannin Mcbee have also been acting irrationally. The trio has sold a combined $3.3 billion of stock since the IPO. Venturo is the second biggest insider seller of any American company this year. Their benefactors at Magnetar Capital have also been acting irrationally. They have sold more than $5.5 Billion of Coreweave stock since the IPO. A lot of people seem to be acting very irrationally.
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Great article today in the Goobe and Mail. While TO keeps telling itself (and anyone who will listen) that’s it’s a « world class city » Montreal just is… This will anger so many of my Anglo friends, but as someone who lived in Paris, NYC it’s so true apple.news/AaH6qh9vnQSyH4jcG…
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cgtheoret retweeted
montreal is quietly one of the biggest ai research cities and nobody outside canada notices
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CoreWeave collapses after Gartner predicts 80% of neoclouds will evaporate by 2030 $CRWV @seekingalpha
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cgtheoret retweeted
AMD CEO Lisa Su just went after Nvidia's $4,000 AI box using a $1,499 machine the size of a lunchbox. Holding it up on stage with one hand, she ran a model with 235 billion parameters live, with no data center, cloud or rented GPU behind it. The surprise is the chip. Inside is AMD's Ryzen AI Max+ 395, which became the first x86 processor whose CPU and GPU draw from one shared pool of 128GB of memory. That one design choice lets a desktop handle models that once needed a server rack. On Linux, 110GB of that pool can go to the GPU. An RTX 5090 offers 32GB. A 4090 offers 24GB. So this box has more than three times either card, in a case about as thick as a paperback. The number that stunned the room: on DeepSeek R1 inference, the chip ran more than 3x faster than an Nvidia RTX 5080. A $1,499 desktop beating a $1,000 graphics card on real AI work. For a decade, Nvidia told the world that serious AI meant Nvidia hardware. AMD just made it a desktop item at half the cost. Now the math. A heavy AI user today might pay for Claude Code Max ($200), ChatGPT Pro ($200), Cursor ($20) and Gemini ($20). That adds up to $5,280 a year. At that rate, the box covers its cost within months, then keeps running at no extra charge. The setup: install Ollama, pull Qwen3 235B, and aim Claude Code at localhost. The interface stays the same. But nothing leaves the machine, there is no per-request bill, and no provider slows you down at 3am when you finally sit down to build. This is where every AI subscription starts to look optional. Lawyers worry less about leaks to OpenAI. Developers stop staring at the token counter. Founders stop renting H100s for prototypes they abandon because of the bill. Whoever gets there among the first thousand will own private AI consulting for the next two years. If you're new here, @GeniusGTX is a gallery for the greatest minds in economics, psychology, and history. Follow along for more similar content.
Readers added context they thought people might want to know
The device Lisa Su demoed, AMD's Ryzen AI Halo Developer Platform (Ryzen AI Max+ 395, 128GB unified memory), sells for $3,999.99 via Micro Center, not $1,499. The $1,499 figure refers to unrelated third-party mini PCs. tweaktown.com/news/112183/am… linuxcompatible.org/story/amd-ryze…
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cgtheoret retweeted
🚨Final nail in the coffin of the AI IPOs? 🚨 “The ten highest-quality models carry 14% of developer tokens, down from 55% last year, as cheaper, "good enough" models win on volume.” theinformation.com/articles/…
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A retired NASA engineer who had worked on the Space Shuttle program for 25 years was hired by SpaceX at age 62. He described the first week as the most disorienting experience of his professional life. At NASA, a design change required 3 meetings, 2 committees, a review board, and 6 to 18 months of documentation. At SpaceX, his new supervisor said "if it works, build it. If it doesn't, change it by Friday." He sat at his desk after the first day and called his wife. He told her he felt like a man who had been swimming with ankle weights for 25 years and someone just cut them off. He could move. He could decide. He could build something in the morning and test it in the afternoon. The constraint that he had accepted as the nature of aerospace engineering turned out to be the nature of bureaucracy. Within 6 months he had contributed to more design iterations than he had completed in his last 5 years at NASA. Not because he was working harder. Because the time between having an idea and testing the idea collapsed from months to hours. The same brain. The same knowledge. A different operating system. He described a specific moment where he proposed a modification to a Raptor engine component. At NASA, the proposal would have entered a queue. At SpaceX, the modification was machined by the end of the day and tested by the following morning. He watched his idea become a physical object in 18 hours. At NASA, 18 hours would not have been enough to schedule the first meeting to discuss whether to schedule a meeting. He told an interviewer: "I didn't get smarter when I went to SpaceX. I got faster. The intelligence was always there. The system was in the way." The difference between SpaceX and NASA is not talent. NASA has extraordinary talent. The difference is the time between a thought and a test. SpaceX compresses it. NASA elongates it. The same engineer produces 10x more at SpaceX than at NASA because the bottleneck was never the engineer. It was the meetings about the meetings about the work.
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How fake scarcity dies
Walmart is selling real diamond earrings for $12. Not a typo. Half-carat lab-grown diamonds, same carbon, graded by the same labs that grade the stone in your engagement ring. A jeweler can't tell them apart without a machine. And that $12 price tag is why the company that invented the engagement ring is about to get sold for scrap. De Beers ran the diamond trade for over a century. At its peak it controlled up to 90% of the world's rough supply, and when demand dipped it just locked diamonds in London vaults until prices came back. The slogan "A Diamond Is Forever" came from their ad agency in 1947. So did the rule that a ring should cost two months of your salary. Before that campaign, most American brides never got a diamond at all. The whole thing held for 80 years because there were only so many mines. Then China started growing diamonds in reactors, and there's no vault on earth big enough to hide a factory's output. Lab-grown wholesale prices have crashed roughly 96% from their peak, down to around $100 a carat. The Knot says 61% of engagement rings sold in 2025 had lab-grown center stones, up 239% since 2020. Even De Beers' own average selling price fell 32% in a year, to $105 a carat. So Anglo American, which owns De Beers, has written it down by $6.8 billion in two years and is now in talks to sell the whole thing for about $1 billion. This is a company that was valued over $18 billion in 2001 and $13 billion as recently as 2011. The stones coming out of the ground are the same as ever. The only scarce thing De Beers ever owned was the marketing, and marketing doesn't survive a $12 price tag at Walmart.
Readers added context they thought people might want to know
Walmart $12 0.5ct "Created White Diamond" studs (Paris Jewelry) often fail diamond testers per reviews and are not genuine lab-grown diamonds. Certified lab-grown 0.5ct pairs list around $79-89. walmart.com/ip/14k-White-G… walmart.com/ip/JeenMata-Ce…
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cgtheoret retweeted
The combined revenue needed for $ORCL $MSFT $AMZN $META and $GOOG to breakeven on Ai investment in the next 4 years (2031) is $7.9 trillion. Their current revenue is $1.9 trillion. 5 companies need to increase their revenue roughly 400% to avoid losses. They need to do it while competing on price wars to the bottom or face bankruptcy. To get from $500 billion to $2 trillion took 10 years and 30% inflation. Now they need to move from $1.5 trillion added in 10 years to $6 trillion (4x) in 4 years (820% FASTER growth rate over the period). We haven’t seen anything on the inflation coming from 5 companies that control the entire economy. 20% of GDP in 2031. $TLT
$ORCL $GOOG $META $MSFT and $AMZN debt and liabilities added in 2026 alone are now equal to 150% of the CARES act that was meant to save people and businesses during COVID, that led to a 10% CPI. Between 2025 and 2026 that number is 200% for debt and liabilities added. Buddy we haven’t seen anything close to the pain coming on inflation as these >$4 trillion of debt and liabilities hit 5 companies balance sheets over the next 2 years. It’s stretched out over 10 years vs 2, but also entirely focused on the highest rung of the ladder in cloud compute that runs the global economy. 10% inflation in the next 2 years is easy. It’s the baseline YOY in late 2027. $TLT
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cgtheoret retweeted
This is the dodgiest and most-desperate thing I’ve seen in the bubble so far. Amazon selling their chips to a group of investors and leasing them back - an off balance sheet arrangement done in plain sight. Really scraping the bottom of the barrel ft.com/content/97d8d346-519e…
FT: Amazon seeks to offload $8 billion worth of Nvidia chips to investors through a new vehicle to strengthen its balance sheet. $AMZN $NVDA
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cgtheoret retweeted
Amazing. These researchers found that there's a spike in Bitcoin activity around the time foreign aid money goes out. Somewhere between 2 and 6 cents of every dollar of World Bank foreign aid disbursements got siphoned off into crypto wallets:
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AI is all that matters for markets right now. AI infrastructure companies now account for 40% of the S&P 500’s market capitalization. At the same time, just 3 chipmaker firms represent 28% of the MSCI Emerging Markets Index. AI-related companies also account for 49% of investment-grade bond issuance so far in 2026. The concentration is even more extreme in private markets, with AI capturing 87% of venture capital funding year-to-date. By comparison, in 1999, during the Dot-Com bubble, less than 40% of venture capital funding was related to internet companies. AI has become the market.
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cgtheoret retweeted
Anthropic ARR is flatlining post tokenmaxxing (as many of us predicted) just as they are about to IPO. Anyone thinking to invest should look carefully at what’s happened in the last three months, relative to the prior 6, and think carefully about whether a $2T market cap makes sense, in a company that is now struggling to maintain its earlier growth.
👀 Interesting data from @tickerplus. Acc to this data, Anthropic's ARR seems to have flatlined around the time when the token index peaked. Many people questioned (rightly) at the time the inferential value of our token index for frontier labs due to the incomplete coverage. We had argued that the token index was likely a leading indicator for where AI usage was headed.
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The AI boom is running into the hard reality of physics. After 2 decades of almost zero power demand growth in the US, ~100 GW of power is needed to run US data centers through 2028, according to Morgan Stanley. To put this into perspective, that's the equivalent of ~100 nuclear power plants needed in 2 years, while it takes ~10 years to build one... You could use gas turbines... but order books are stretching into 2030, and manufacturers are struggling to ramp up production. The latest news of Oracle declaring force majeure on its New Mexico data center could be the canary in the coal mine for the AI industry. No power = no AI.
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I am one of those who ran to get a Mac mini and indeed I kind of feel stupid
RIP to everyone who bought a Mac Mini to run OpenClaw or Hermes Agent 24/7 💀 including myself digitalocean now runs claude code and codex for you in the cloud you can close your laptop and the agent keeps working. the second it goes idle it pauses and you stop paying for compute it wakes back up in ~300ms into the same session on any device the model never even sees your API keys cloud agents are the future
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“The mind, once stretched by a new idea, never regains its original dimensions.” – Oliver Wendell Holmes via @momentumdash
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Nearly a dozen executives have left OpenAI in the past few months alone: "Considering the company keeps delaying its IPO and the fact that it is losing tens of billions of dollars, you have to wonder if they are simply losing faith in the company. This week, OpenAI's COO left the company after eight years. But one day before his departure, OpenAI's head of ethics also left. Before that, the head of safety systems left. Also the chief futurist. Also the head of Sora. Also the head of robotics."
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