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