Grant's on how CEOs of AI builders see massive demand swamping supply

Open before us is page 8 of the June 8 edition of The Transcript, a weekly roundup of earnings-call excerpts.  The first quotation, from Lip-Bu Tan, CEO of Intel Corp., sets the tone for what follows: "We see token usage exploding.  Agent now consumes 1,000x more tokens than single-event reasoning."

Sundar Pichai, CEO of Alphabet, Inc., is next: "[W]e are experiencing strong demand for our AI solutions from enterprises and consumers, at levels that are meaningfully exceeding our available supply."

He is followed by the CEO of Microsoft Corp., Satya Nadella: "[W]e are supply-constrained...  The thing that we do not want to do is to disappoint especially our enterprise consumers on Azure."

Then comes Jeffrey Clarke, COO of Dell Technologies: "Demand continues to exceed supply with memory as the primary constraint, and we expect to exit the year with meaningful backlog."

And not to forget Jensen Huang, CEO of Nvidia Corp.: "[W]e don't have enough supply.  The reason for that is because the world supply chain is supply-constrained.  We have the support of our ecosystem to have very robust growth, and well in support of whatever guidance we've provided."

Finally appears the CEO of Cerebras Systems, Inc., Andrew Feldman: "What is unusual about AI right now is the builders are so far behind the demand, it's absurd.  We have a backlog of more than $2 billion of demand...  [N]one of us, not us, not AMD, not Nvidia, can keep up with the demand that your employees are driving.  And that's sort of, in a lot of ways, the opposite of a bubble.  We are chasing, right?  Our customers and their customers are moving at the speed of software, and we're moving at the speed of real estate, data centers, right?  Um, and so we are behind."

~ Grant's Interest Rate Observer, "Hanging by a stock price," June 19, 2026

 

Evan Lorenz on DeepSeek's latest model, V4

Evan Lorenz: In January 2025, DeepSeek released its R1 model, which offered comparable performance to the best Western chatbots at a fraction of the price.  As Western investors digested the news of cut-rate, Chinese competition, the Nasdaq sold off.

Grant's: Mr. Market is turning a blind eye so far to the recent unveiling of DeepSeek's latest model, V4.  Like R1, V4 slightly underperforms the leading Western competition but sells at a fraction of the Western cost.  Bloomberg explains how: "DeepSeek's trillion-parameter system uses the Mixture-of-Experts technique, selectively triggering only a small subset of experts and activating only up to 37 billion parameters per task to keep inference costs far lower than for similar frontier models."

DeepSeek has put its model up for sale at 75% off until the end of the month, but once that discount ends, V4 will cost between just one-tenth to one-quarter of the leading American equivalents.

Lorenz: Price competition is what just might deflate the high-cost and capital-intensive AI boom.

~ Evan Lorenz, "The way the boom ends," Grant's Interest Rate Observer, May 8, 2026

 

OpenAI's CFO: "We are facing a vertical wall of demand"

Right now we are facing a vertical wall of demand.  If there are areas where we are not achieving certain goals, I would say it is often the lack of computational capacity that is slowing us down to some extent. 

~ Sarah Friar, OpenAI chief financial officer, Bloomberg interview, "OpenAI: We see a vertical wall of demand for our products," 24 ORE, May 1, 2026

 

Karen Kwiatkowski on the Iran war: a tale of two empires

Our military footprint in the Gulf and the region has contracted; this will continue.  What we just watched over the past 100 days was an unusually vivid moment in the long slow collapse of the US military and financial empire. 

Conversely, tiny Israel saw its fluid borders expand in all four directions.  The cover of this war coincided with new bases in Somaliland, new gas fields through occupation of southern Lebanon and Gaza, massive Israeli expansion through land and political purchase in Greece, Cyprus, and Albania, and the exponential erasure of Gazans, Palestinians, Lebanese and Syrians. 

[...]

A truly defensive military and intelligence apparatus, at a fifth or even a tenth of what we spend today, as well as a structural jettisoning of special alliances that animate the current defense budget and focus, including but not limited to Israel, are now within reach for the US, in part because of what happened over the past 100 days.  The empire will oppose any changes in this direction, but our dry shell of an empire has few choices. 

In a strange way Trump will bring the troops home, and end US wars of choice, and like the captain of the Titanic, he will ride the ship, damaged by arrogance and overreach, into the deep. 

But before the empire fades, it retrenches, and global war-mongering becomes totalitarianism at home, national intelligence becomes domestic surveillance, AI looks inward to identify potential enemies of the state, and maps their communities for decimation or economic lockdown.

[...]

Today, we are in the midst of the collapse of two empires, one tiny and vicious, the other lumbering and lazy.  These two empires suffer different illusions, but Israel, under fascist Zionism, has dibs on discipline and seeks to rule.

[...]

US imperial retrenchment has been happening under our very noses, slowly at first with our devalued currency and never-ending wars, but the pace is quickening.  Notably in this 250th year after the Declaration of Independence, every American needs to be prepared for war at home.

~ Karen Kwiatkowski, "The US Empire is Retrenching, Bringing Imperialism Home," LewRockwell.com, June 15, 2026

 

Ed Zitron on AI ROI

I think people are conflating a semiconductor rally with an underlying successful business, which doesn't really exist.  Anthropic's current revenue growth, which is deeply questionable and the fact that they "leaked" profitability - manipulated by Elon Musk, of course - their growth is coming because people cannot measure how much an AI task actually costs.  And a couple months ago, Anthpropic actually started charging their enterprise customers the actual token rates.  What this has led to is suddenly businesses are saying, "Oh, how much money are we spending?"  Uber's COO Andrew McDonald said that they are having trouble justifying the AI spend based on the actual return when one can actually measure it.  So you've got a thing where you can't measure the costs and you can't measure the return on investment.  What do you call that?  You call it a thing without an ROI.

~ Ed Zitron, EZ Primary Research CEO, interview on Bloomberg Businessweek Daily, June 4, 2026

 

Aristotle on knowledge

The purpose of knowledge is action, not knowledge. 

~ Aristotle

 

Dan Niles on the importance of OpenClaw

The one thing you have going on right now that you didn't have during the internet build out, on January 30th you had the formalization of this thing called OpenClaw [a free, open-source, self-hosted autonomous AI personal assistant/agent], which really kicked off the whole agentic [AI] move by corporations.  So Dan Nathan, instead of prior to that saying, "I'm going to ask ChatGPT a question, it's going to give me an answer" might go to ChatGPT and instead of asking, "Well, how did internet stocks perform in the late '90s?" you might go and ask ChatGPT, "Hey, go to Bloomberg, pull down data for all of these 20 internet companies, then go to the SEC website and go look at the 10-Ks and Qs, see if there were any writedowns, and then go and see what the news stories were at The Wall Street Journal, and then create a spreadsheet where I'm putting all of this data."

When you do that, that takes 10 to 100 times more tokens [basic units of text that the LLM reads, processes and generates; 100 tokens ≈ 75 words] and you can see that in the tokens being generated.  And so you have this step function change in compute demand caused by that that started on January 30th.  So I think you're going to see very strong demand for at least another year until you sort of anniversary that, and I think stocks continue to go higher because of that.  

Do I think we're in a bubble?  100%.  Do I think we're going to get a 30-50% drawdown at some point next year?  Yes.  But, do I think you can make a lot of money between now and then?  I think the answer to that is also, yes.

 ~ Dan Niles, "We're 100% in a Bubble and Dan Niles is Still Buying," RiskReversal Media, 6:00 mark, May 29, 2026

 

Dan Niles on agentic AI and the need for compute

With agentic [AI] you're doing multiple actions, multiple calls to APIs, opening up applications like an Excel or a Bloomberg or a CNBC website or SEC website, etc. and doing all of these things.  So you need an orchestration engine.  You need something that goes ahead and organizes all of that.  That's what CPUs do very well.  If you go back to training, you're just doing the same thing over and over again where you are training these AIs.  That's what a GPU does incredibly well, and that's why you saw an Nvidia absolutely explode higher because CPUs weren't really valuable in training.  You move to chat-based AI, again, that's pretty decent for a GPU, but now when you move to agentic, that's great for a CPU.  So you went originally from about 8 GPUs for 1 CPU.  When you move to agentic, that ratio gets closer to 1-to-1.

[...]

Agentic [AI] requires 10 to 100 times more tokens than chat-based AI.

~ Dan Niles, "Dan Niles: Be Nimble - 30-50% AI Crash By 2027," The Master Investor Podcast with Wilfred Frost, 11:40 mark, May 12, 2026

 

Dario Perkins on the AI capex debate

With U.S. tech stocks melting higher, the bulls are clearly “winning.” Two forces are driving this revival in sentiment. First, revenues across the AI ecosystem have surged, which seems to contradict the bears’ worries about data-center profitability. Second, we are seeing extremely strong demand for compute, which helps to alleviate investors’ worries about “overinvestment.” 

From our perspective, however, the debate about the sustainability of AI capex hasn’t been settled. Far from it. That’s because what we are seeing now is still largely just the result of revenue recycling, rather than the entry of new funds from outside the AI ecosystem. 

To illustrate: This year the hyperscalers are set to spend around $700 billion on data centers. That is a huge sum. Not only does it directly boost the revenues of the companies that provide the infrastructure, but the hyperscalers are also booking revenues from the recycling of those investments, either as order backlogs (“commitments” from the likes of OpenAI) or as “other revenues” (derived from the hyperscalers taking an equity stake in their customers and then recording large capital gains). 

Meanwhile, it is the model developers and the hyperscalers that are still driving much of the increase in demand for compute, as they put those massive AI investments to work. This whole ecosystem is massively circular; and while those circular dynamics clearly have a lot of momentum, that, in itself, isn’t enough for medium-term sustainability. For AI capex to be sustainable over the medium term, there needs to be a much larger share of revenue (and compute demand) from outside the ecosystem, particularly from business and consumer demand. Capex recycling isn’t enough. 

~ Dario Perkins, "The AI capex debate—who is right?," Macro Picture/TS Lombard, May 21, 2026

 

Kevin Duffy on U.S. aggressions against Iran

The world doesn't trust Iran because it has memory-holed past U.S. aggressions: 

1953 - CIA-led coup overthrows democratically elected prime minister of Iran, Mohammad Mosaddegh; installs U.S.-friendly Shah, authoritarian monarch. 

1957 - SAVAK (secret police) is established with CIA and Israeli (Mossad) assistance; this becomes the Shah’s primary tool of repression. 

1979 - U.S. first imposes sanctions after the Shah is overthrown; these undergo a major expansion in 1995 under Clinton. 

1980-1988 - U.S. backs Saddam Hussein in Iran-Iraq War, costing hundreds of thousands of Iranian lives 

1988 - USS Vincennes “mistakenly” shoots down civilian Iran Air Flight 655 on July 3 over the Strait of Hormuz. All 290 aboard are killed, including 254 Iranians and 66 children. The US calls it a tragic error in a combat zone; Iran views it as deliberate. 

2025-2026 - US and Israeli strikes on Iran (starting late February 2025/early 2026) cause thousands of Iranian deaths, including a missile strike that hit the Shajareh Tayyebeh girls’ elementary school in southern Iran, costing 156 lives, 120 of them schoolchildren.

~ Kevin Duffy, tweet, April 28, 2026

 

Hans-Hermann Hoppe on democracy

What is true, just and beautiful is not determined by popular vote.  The masses everywhere are ignorant, short-sighted, motivated by envy, and easy to fool.  Democratic politicians must appeal to these masses in order to be elected.  Whoever is the best demagogue will win.  Almost by necessity, then, democracy will lead to the perversion of truth, justice and beauty.

~ Hans-Hermann Hoppe, Democracy: The God That Failed, 2001 

 

Kevin Duffy and Jeremy Hammond on participatory democracy, i.e. voting

Duffy: A key pillar of the statist belief system is participatory democracy.  Everyone gets a say (or vote), no matter how ignorant they are of the inner workings of the system.  This way critics like us are more easily dismissed.  Normally, 10,000 hours of study would qualify us as "experts," but not in this case.  There are no valued experts on the system itself.  It's simply assumed to be the greatest system of societal organization ever conceived by mankind.  To suggest otherwise is to be dismissed as a heretic. 

Hammond: Ah, yes, a huge part of the problem is the compulsion to vote—or as I prefer to describe it, to act to legitimize the criminal organization in Washington. I don't want to bicker over which head of the beast should devour us; I want to slay the beast.

~ Kevin Duffy and Jeremy Hammond, email exchange, April 29, 2026

 

Jeremy Hammond on statism

It is too discomforting for people who cling to a statist belief system to conceive of the possibility that their whole perception of society and government is mistaken, that the government is not some benevolent force for good but a criminal organization perpetually doing evil.  Their minds cannot handle it.  They choose self-delusion over love of truth.

~ Jeremy Hammond

 

Bob Dylan on war and religion

Oh, my name, it ain't nothin', my age, it means less 

The country I come from is called the Midwest

I's taught and brought up there, the laws to abide 

And that the land that I live in has God on its side

 

Oh, the history books tell it, they tell it so well 

The cavalries charged, the Indians fell 

The cavalries charged, the Indians died 

Oh, the country was young with God on its side 

 

The Spanish-American War had its day

And the Civil War too was soon laid away 

And the names of the heroes I was made to memorize 

With guns in their hands and God on their side

 

The First World War, boys, it came and it went 

The reason for fightin' I never did get 

But I learned to accept it, accept it with pride 

For you don't count the dead when God's on your side

 

The Second World War came to an end 

We forgave the Germans, and then we were friends 

Though they murdered six million, in the ovens they fried 

The Germans now too have God on their side 

 

I learned to hate the Russians all through my whole life 

If another war comes, it's them we must fight 

To hate them and fear them, to run and to hide 

And accept it all bravely with God on my side 

 

But now we've got weapons of chemical dust

If fire them we're forced to, then fire them we must 

One push of the button and they shot the world wide 

And you never ask questions when God's on your side 

 

Through many dark hour I been thinkin' about this 

That Jesus Christ was betrayed by a kiss 

But I can't think for you, you'll have to decide 

Whether Judas Iscariot had God on his side 

 

So now as I'm leavin', I'm weary as hell 

The confusion I'm feelin' ain't no tongue can tell 

The words fill my head, and they fall to the floor 

That if God's on our side, he'll stop the next war

 

~ Bob Dylan, "With God With God on Our Side," 1964

 

 

Liz Ann Sonders on investing vs. gambling

When you invest, the odds are in your favor.  When you gamble, the odds are not in your favor.

~ Liz Ann Sonders, "Energy Prices Aren't Matching With Reality," RiskReversal Media, 7:20 mark, April 10, 2026

 

Winston Churchill on the Irgun and Stern Gang

If our dreams for Zionism are to end in the smoke of assassins' pistols and our labours for its future to produce only a new set of gangsters worthy of Nazi Germany, many like myself will have to reconsider the position we have maintained so consistently and so long in the past.  If there is to be any hope of a peaceful and successful future for Zionism, these wicked activities must cease, and those responsible for them must be destroyed root and branch. 

The primary responsibility must, of course, rest with the Palestine authorities under His Majesty's Government.  These authorities are already engaged in an active and thorough campaign against the Stern Gang and the larger, but hardly less dangerous, Irgun Zvai Leumi.

~ Winston Churchill, speech in the House of Commons, November 17, 1944, delivered shortly after the assassination of his friend Lord Moyne by Lehi (Stern Gang) members 

Jeremy Hammond on trusting information sources

I often get asked what sources I trust, and my usual answer is: none of them. While it can be a practical necessity to take a source's word for something, we should avoid doing so unless the source has a proven track record of honest and accurate reporting on that specific topic. And just because a source provides good information and insights on one topic doesn't mean it's good on others. A source assessment is required to separate the wheat from the chaff for individual sources, just as it's necessary when comparing different sources against each other. 

Instead of relying too much on any specific sources, it's to get your information from as wide a variety of sources as possible. Seek out alternative perspectives that challenge your own. Avoid the trap of selecting sources to follow because their information confirms your own paradigm. Be cognizant of your own confirmation biases and the limits of your knowledge, and remain open to the possibility that everything you think you know is wrong. Treat your conclusions and beliefs as hypotheses to be tested against opposing perspectives. 

Critically assess each source with consideration for their potential biases. Maintain healthy skepticism and check key claims against cited sources. There mere inclusion of footnotes or links in an article can make a story or argument appear well supported, but this is commonly an illusion. Oftentimes, cited sources fail to support or even directly contradict claims for which they are cited. As you consume news media, identify the agenda being served and consider whether any political or financial interests might conflict with the aim truth-telling. 

Through that process, you'll develop a wider overview of the informational landscape and won't miss the forest for the trees. Determine common ground by identifying key claims that are uncontested. Then synthesize conflicting claims to reconcile the contradictions. Apply your source assessment to determine what seems most credible, and hypothesize an explanation that best fits the available evidence. Conflicting claims can be often be easily reconciled, for example, by simple recognizing that at least one of the sources is demonstrably lying. Through this analytical process, you'll come away with a new working hypothesis to test against new information as you continue to expand your knowledge about the topic. 

With an infinite number of topics to focus on and limited time, you'll also learn to distinguish distracting noise from matters of real importance, and the more you develop these types of analytic skills for news consumerism, the better you'll get at it and the easier it'll become, so you'll eventually be able to rather quickly and easily assess information and draw reasonable conclusions. The effort you put into developing these skills will pay dividends as you acquire actionable knowledge and avoid becoming deceived by the incessant political propaganda that permeates our information environment.

~ Jeremy R. Hammond, independent journalist, www.jeremyrhammond.com