Financial bubbles work in three steps:
1- Biases create them
Winning in markets makes people wait for more wins.
2- Arbitrage limits let them continue for longer
You can’t bet against the bubble, even if your models are correct, because you will have to face the market sentiment.
3- The bubbles prove themselves
A small revision in growth affects the price in big ways.
With that in mind and with the current drawdowns linked to the Anthropic leak announcing less growth than expected, I will be prudent about my incoming decisions around my projects and investments. The goal is to mesure the risks in bad scenarios without biases on any side.
Simon retweeted
GPUs are financed for years. AI workloads run for weeks.
Our Compute Market-Making White Paper explores that gap:
1. Financing shapes the short-term premium.
2. Not everyone can capture this premium.
3. Hedging reduces tail risk, but comes at a cost.
Simon retweeted
Trading firms are building desks to trade GPU compute like a commodity
Jump Trading has hired the founders of GPU trading platform Itô Markets to run a new compute desk, per Bloomberg. DRW and Vitus Commodities posted compute trading roles last month.
DRW's Don Wilson says compute could surpass crude as the world's largest commodity. CME has delayed its planned GPU rental futures.
The constraints look like power markets. Compute cannot be stored, forwards run three to five years, and the CFTC has flagged concentrated pricing power.
CoreWeave shows the credit side. It finances GPUs against offtake contracts, and Bloomberg currently says its debt prices a 60% chance of default within five years.
Compute curves will end up tied to power curves. The desks that price both will set the market.
These proportions image well how the global economy may look like going forward.
On one side, a handful of people with all the information and mean of production (super intelligent software and hardware) who are literally printing 99,9% of global GDP.
On the other side, the big majority who are still treating human work as indispensable, working simply "for the love of the game" in a carefully crafted social net ignoring what the world has become.
Both sides will live a great life, but let’s just say that they will not live it at the same level.
Dusting off this tweet from April because this gap in shared understanding of LLM capability is *widening*. It's now less "two groups of people speaking past each other" and more a sharp funnel.
- Napkin math somewhere around 6B people (~75% of the population) have barely come in contact with LLMs at all.
- Around 1-2B (~20%) are casual and infrequent users of free-tier ChatGPT-like products. This group sees derpy chatbots and treats them a bit like a better Google search, a writing aid, or etc. Maybe an agent tries to book you a flight. I have non-tech friends who (reasonably, imo) say they have not much use for it at all. Even many professionals outside of math&code are in this tier. For example, execs and many other functions spend a lot of their time talking to other people, so while they understand what is happening intellectually, it is still second-hand and a bit abstract.
- Now we get to professional use of frontier-grade LLMs in math&code. Somewhere around 20M people (0.2%) see first-hand that large, complex projects that used to take them weeks/months can now be completed by agents with a prompt. Building apps, copying apps, translating apps, decompiling apps from binaries... This has all happened very quickly and recently - less than 1 year ago, I was writing code manually by hand, typing memorized computer code commands into a code editor character by character, occasionally pressing Tab to autocomplete a little chunk of code.
- And finally we get to the ~5,000 people (~0.00006%) with access to frontier-grade systems internally. The external world has seen the preview. It looks like swarms of thousands of agents collaborating over weeks on software mega projects: minting zero days, running cyber attacks and defenses at machine speeds, discovering new science, advancing the frontier of mathematics. Things that would have taken top professionals in the industry years of work. Meanwhile, human review and comprehension are starting to fall behind. For example, people are still involved in the "archeology" of the OpenAI-HF incident from many months ago. Mathematicians may be poring over the 722 manuscripts on frontier mathematics for a while.
The funnel is driven by a combination of factors:
1. The impact scales with ambition, problem size, and horizon. A question with a paragraph answer barely stresses the system. You need a reservoir of big, difficult problems that you really care about. This aspect drives the consumer / professional dimension of the funnel.
2. The jaggedness of the system (which I have written about a lot separately). Capability peaks in domains that are digital, verifiable and economically valuable. This is because LLM capability emerges from reinforcement learning on verifiable rewards on a curated environment mixture driven by revenue potential. This aspect primarily drives the area (e.g. math&code) dimension of the funnel.
3. Access. Free-tier, paid-tier, internal.
So this is the weirdness of the moment. The general public has mostly not interacted with these systems. When they have, it looks like a derpy chatbot. The majority of professionals still see only a modest uplift. And a small sliver of professionals are experiencing the vertigo of the curve going vertical. And it is all happening at the same time.
okay not trying to fud but…
@papertrade_xyz doesn’t actually execute trades on hyperliquid. it just uses hyperliquid prices to settle synthetic positions against its own LPs, with 1000x leverage and some questionable payout asymmetry when prices gap.
my concern is what happens when enough people figure this out. or someone big decides to trigger a volatility event that could drain the LP, and leave everyone queuing for withdrawals.
using hyperliquid prices and trading on hyperliquid are two very different things. not sure if most trading on paper actually understand the difference.
Simon retweeted
When your X feed is all compute and commodities, it's time to put that Series 3 to use.
My latest Power Bytes, Future(s) of Compute is my take on whether compute futures can do what commodity markets were designed to do. 🧵
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With this new spectrum and our Gen2 constellation, Starlink Mobile can ensure Americans have access to high-speed mobile broadband no matter where they are → spacex.com/updates#starlink-…




















