Limitless: An AI Podcast

Ejaaz:
Elon Musk just spent over a billion dollars of his own money to buy a company

Ejaaz:
that no one's ever heard of.

Ejaaz:
It's called APR. And the strangest thing about this company is it doesn't make

Ejaaz:
AI chips, it doesn't make rockets, it doesn't make any sort of AI model.

Ejaaz:
It makes gas turbines that sit on a trailer, get wheeled into your data center

Ejaaz:
campus, and powers it on all your GPUs in a matter of days.

Ejaaz:
Now, this is coming from the guy that spent two decades philosophizing about

Ejaaz:
solar energy. But when you unpack why he made this purchase,

Ejaaz:
it reveals a new trade in the AI space, which explains why memory stocks are crashing currently.

Ejaaz:
Energy is explicitly abundant in the US, but bringing that energy online to

Ejaaz:
power the billions of dollars worth of GPUs that are going online this year

Ejaaz:
is an incredibly hard feat. And

Ejaaz:
there's a small category of companies that are helping do this in 2026.

Josh:
Yeah, there's a company called APR Energy, which is the name of the company

Josh:
which he purchased. And it has a pretty funny backstory.

Josh:
It was founded in Jacksonville in 2004, then listed on the London Stock Exchange in 2011.

Josh:
And in 2013, it bought GE's energy rental business to become the largest mobile

Josh:
gas turbine leaser in the world.

Josh:
And then ever since then, it's been passed around and taken private to private equity.

Josh:
And due to some investigative work and searching through

Josh:
Elon Musk bought it for about a billion dollars. So what did he get for a billion

Josh:
dollars? The answer is about a gigawatt of power.

Josh:
For reference, a gigawatt of power powers roughly 750,000 homes,

Josh:
and it's also the output for one size nuclear reactor.

Josh:
This gigawatt is also enough power for about 600,000 H100 class GPUs,

Josh:
which is, I mean, as far as I'm concerned, the largest coherent cluster.

Josh:
So if he's actually able to get another gigawatt, that's amazing.

Josh:
But the question that left me is why is this owned by elon and not spacex ai

Josh:
or tesla it's like why of all the categories is he choosing this one why this

Josh:
particular company and why on his personal balance sheet

Ejaaz:
Yeah so i i have a few theories as to

Ejaaz:
why he might want to do this um one

Ejaaz:
obvious one is he might want this to apply to a bunch of different companies

Ejaaz:
the other main one being tesla and Tesla, for what it's worth,

Ejaaz:
is meant to be an exclusive company separate to SpaceX AI, although there are

Ejaaz:
rumors that they might eventually merge at some point in the future.

Ejaaz:
So I think this is more of like a tax slash structural reason why he purchased

Ejaaz:
the company on his own dime.

Ejaaz:
In fact, the only reason why we learned about this purchase is because one of

Ejaaz:
the companies that was invested in APR had to disclose personal returns of $50 million.

Ejaaz:
That's the only reason why we were able to realize that Elon made this purchase. Now.

Ejaaz:
If we zoom out for a second, we've heard that energy and power is the next bottleneck

Ejaaz:
for AI. But I think a lot of people don't actually understand why and what the

Ejaaz:
problem is. So I just want to touch on that very briefly.

Ejaaz:
Now, if we rewind about three years, 2023, the demand for data center energy

Ejaaz:
was roughly at around 23 gigawatts, which at the time was gargantuan.

Ejaaz:
We did not have near that amount available to bring online.

Ejaaz:
Fast forward to 2026, that has more than doubled to 46.5 gigawatts, I believe, in total.

Ejaaz:
Now, the issue is, in this year alone, we are only planning to bring online

Ejaaz:
12 gigawatts. That's significantly less than that 46 target, right?

Ejaaz:
But it gets even worse. We are currently on track, and we're near over half the year now.

Ejaaz:
On track to bring online five gigawatts of that 12 gigawatts commitment.

Ejaaz:
So the point I'm trying to make is there is a significant bottleneck and it's

Ejaaz:
very, very slow to bring energy online. Now, if you might ask,

Ejaaz:
well, don't we have an abundance of energy in the West and America in general?

Ejaaz:
The answer is, yeah, we do.

Ejaaz:
But it's incredibly hard to bring this energy online.

Ejaaz:
We need access to high voltage transformers. We need access to grid infrastructure.

Ejaaz:
We need all the permitting and regulations around this, all of this slows everything

Ejaaz:
down to the tune of five to seven years. I'm not exaggerating.

Ejaaz:
We're talking about like almost over half a decade to do any of this.

Ejaaz:
Now, what Elon's purchase shows us is he's kind of going into the gray area.

Ejaaz:
Now, there's this thing called the Clean Air Act.

Ejaaz:
And it's basically this act which states you can't bring gas turbines onto your

Ejaaz:
data center in order to power up your GPUs. That's kind of like not illegal,

Ejaaz:
but it's allegedly kind of like not malpractice.

Ejaaz:
Now, the fact that he's purchased this company allows him to bring permitted

Ejaaz:
gas turbines onto his data center ground under that clean air act.

Ejaaz:
So it doesn't trigger any kind of like warnings or anything like that,

Ejaaz:
which allows him to power up his GPUs.

Ejaaz:
So Elon's being very smart. He's trying to be the fastest scaler for bringing

Ejaaz:
GPUs online so he can build the best model. That's what Meta's trying to do.

Ejaaz:
And that's what he's trying to do with Grok 4.5 and subsequent models.

Josh:
Yeah, it's a race to power these GPUs. And like you mentioned,

Josh:
the infrastructure is the problem here when it comes to creating power.

Josh:
It is less the actual power. We have all of the resources, we have the oil,

Josh:
we have the natural gas, we just have a very difficult time plugging it into

Josh:
the infrastructure that we need to turn these things on.

Josh:
And if you look at the country like veins, all the power lines that run through,

Josh:
the grid is really strained, and it's in a really difficult place.

Josh:
And I remember having this conversation a decade ago when I was first getting

Josh:
excited about electric cars and teslas and the impact that just charging all

Josh:
of those cars would have on the grid and how difficult it would be to sustain

Josh:
and at that time we were barely keeping up

Josh:
now we are still barely keeping up so to put on cities worth of energy online

Josh:
into these existing grid structures it causes a lot of trouble and a lot of

Josh:
problems which leads us to the one way to actually do that which is more of

Josh:
a modular solution instead of tapping into the grid you have to bring your own

Josh:
power, bring your own electrons.

Josh:
And there's three key categories to doing that. The first is solar,

Josh:
Solar has the largest footprint in terms of these options. Solar generally works

Josh:
by just absorbing a lot of sun, store it in batteries, feed the batteries into the data center.

Josh:
This is good, but it doesn't allow you to get as much as quickly as densely.

Josh:
And the permitting, as we know, is a really difficult thing.

Josh:
The second option is nuclear. Nuclear is a kind of far cry from being readily

Josh:
available for data centers today, which brings us to the third,

Josh:
which is just bring your own turbine

Josh:
bring these turbines tap into a net gas line and they're on their way because

Josh:
these turbines can just generate electricity on site and in a way these data

Josh:
centers are starting to build their own electrical grids

Josh:
and then perhaps they can reverse their way into feeding the existing grid but

Josh:
for now they just need to get energy to the data centers and the best way of doing that is just

Josh:
bring your own bring your own power grid and that's kind of the basis of this

Josh:
investment here with elon is like he's now able to

Josh:
buy a company that owns these turbines and he's going to bring them over to

Josh:
the data center and power these chips on faster than everyone else.

Josh:
This is what it's come down to. You have to actually acquire private companies

Josh:
and roll out your own infrastructure if you want to build this.

Ejaaz:
Isn't that insane that we are in a position where in order to get access to

Ejaaz:
like a basic commodity, electricity, to power the thing that's going to make your country, your GDP,

Ejaaz:
increase significantly, you have to go through all this archaic permitting laws and stuff.

Ejaaz:
New York State just banned a bunch of data centers. So that's going to delay

Ejaaz:
data centers in New York by like five years.

Ejaaz:
It's just crazy that we have to go through all this red tape.

Ejaaz:
But nevertheless, this is a workaround.

Ejaaz:
And if gas turbines on a trailer sounds familiar, you are probably thinking

Ejaaz:
of other companies like Bloom Energy and publicly traded stocks and companies

Ejaaz:
that might be fixing or solving this bottleneck. We'll get to that.

Ejaaz:
Eventually later on in this episode. But before we do that, we have to talk

Ejaaz:
about the movement of funds and capital within the AI trade.

Ejaaz:
Because for a lot of time on this show, Josh, we have spoken about a little

Ejaaz:
component called memory.

Ejaaz:
And memory feeds into a ton of things, most significantly, the GPUs that power

Ejaaz:
the training and inference of all these different AI models.

Ejaaz:
And one common trend that's happened with these memory pieces is the prices

Ejaaz:
of these things have skyrocketed to the tune, I think it's on average three

Ejaaz:
to 500% over the last nine months. So it is absolutely insane.

Ejaaz:
The types of demand that we're seeing for memory, high bandwidth memory is the

Ejaaz:
most obvious one, but also NAND flash, the stuff that's created by SanDisk and stuff like that.

Ejaaz:
And these stocks have taken a little bit of a battering recently.

Josh:
Yeah, memory stocks have been absolutely crushed. It's been a really difficult

Josh:
time to invest in them if you've only owned them for two weeks.

Josh:
If you've owned them for any longer, congratulations, you're still doing incredible.

Josh:
But there has been this whiplash, right? That's kind of happened in memory stocks

Josh:
where they went up seemingly 20% every single day for months on end.

Josh:
And now they've started to back off collectively about 20% off of the highs.

Josh:
And this is interesting because when you compare the actual price of memory

Josh:
stocks to the price of memory, the price of memory is continuing its up only

Josh:
trend. In fact, just this month, it looks like the price, the average price of DRAM

Josh:
is up almost 20% on the month, which is crazy. Yes, this is the chart that I was looking at.

Josh:
When you look at the month of July, the cost of DRAM is up 20% and the stocks

Josh:
are down 20%, even though the demand has not changed one bit.

Josh:
So that's why it seems like the market is a little spooked and rightfully so.

Josh:
I mean, these stocks just ran up a tremendous amount. When you look at the actual

Josh:
core cost of goods sold relative to the margin that they're able to charge for

Josh:
these things, it's still continuing to go up only and that demand curve hasn't slowed.

Josh:
And this is the interesting thing here is like memory stocks are getting crushed

Josh:
memory prices are still going up but it seems like people are just kind of tired

Josh:
of that narrative and the money is just starting to flow into other more exciting

Josh:
places because i mean perhaps everyone's just made enough on the memory trade for now

Ejaaz:
I i think the markets are incredibly emotional and if we use memory as an example

Ejaaz:
to your point demand hasn't wavered it's just gone exponentially up the prices

Ejaaz:
of these things uh going up prove it but also the

Ejaaz:
ltas the long-term agreements which is basically the contracts that these memory

Ejaaz:
suppliers are signing with clients.

Ejaaz:
There was this crazy stat for SK Hynix, which is, I think, the number one or

Ejaaz:
number two memory supplier in the world. There's only three of them.

Ejaaz:
Between 13 to 15 customers secured around 40% of their projected profit for next year.

Ejaaz:
So they've already sold out their supply for the entirety of 2027.

Ejaaz:
And 40% of that, 40% of that profit has already been committed to.

Ejaaz:
So they have to pay regardless of what happens with memory supply next year, 13 to 15 people.

Ejaaz:
So the point I'm making is the demand is overwhelming at this point and nothing

Ejaaz:
has actually changed. If you look at Micron, let's pull up their chart over here.

Ejaaz:
Over the last month, they're down around 24%. But when I look at their forwards

Ejaaz:
earnings, their 7x forwards earnings on 350% revenue and 85%, 85% gross margins.

Ejaaz:
There is very little businesses, especially in the hardware realm,

Ejaaz:
that makes that type of margin.

Ejaaz:
And the point is like, you can call a memory bubble as soon as there's oversupply

Ejaaz:
for this type of commodity.

Ejaaz:
But the truth is the fabricators, the plants, the factories that are creating

Ejaaz:
these things aren't in overabundance just yet. And that bottleneck isn't going

Ejaaz:
to get unlocked until around 2030. But we see people getting frustrated.

Ejaaz:
So I think this is just temporary.

Ejaaz:
And if you want to look for a reason, a thing to blame, look no further than...

Ejaaz:
Our friends over in South Korea. Now, a reminder for everyone,

Ejaaz:
the two biggest memory suppliers are based in Korea.

Ejaaz:
It is SK Hynix and Samsung. And there was a lot of red on the chart,

Ejaaz:
as I'm showing you on my screen here, over the last two weeks,

Ejaaz:
because a lot of investors in Korea were over leveraged to the tune of about a billion dollars.

Ejaaz:
And so the market has shed the equivalent value over the last week to the tune

Ejaaz:
of $1.5 trillion. Now, of course, that is an order of magnitude larger.

Ejaaz:
I was being a little kind of tongue in cheek there. But the point is,

Ejaaz:
the market is overreactive.

Ejaaz:
And I think this is just oversold. The fundamentals still sit and memory is

Ejaaz:
still an important trade, but people are looking for other things.

Ejaaz:
And maybe that's power and electricity for now.

Josh:
Yeah, I think that's probably the rotation that's happening is people are like,

Josh:
I'm done playing with this toy for now. And the fundamentals are still very

Josh:
strong, but I mean, everyone's just gotten a huge win and are probably just

Josh:
looking for something else.

Josh:
Our guess, and the reason we're recording this episode is because it seems as if that is going to be

Josh:
energy it is going to be powering these things on so like everyone's like okay

Josh:
well we understand memory now we understand the complex sk heinix just went

Josh:
public perhaps that marked like

Josh:
the end of people's enthusiasm towards it where does the money rotate out to

Josh:
well probably this electricity trade and we've mentioned this a few times in

Josh:
the past but the electricity trade at least for me personally is the most exciting

Josh:
of all of the trades because it's something that is so

Josh:
durable and so necessary in any advancement of any society ever so even in the

Josh:
case all the data centers turned off tomorrow there's still this unbelievable

Josh:
demand for electricity in everything that we do

Josh:
and that's why the electricity trade is this really exciting thing that i'm

Josh:
kind of happy to see dollars

Ejaaz:
Moving over to.

Josh:
Um because i mean yeah if we look at these charts that we have here the u.s

Josh:
data center power demand is basically doubling

Josh:
over the next 24 over the course of 24 months from 31 gigawatts to 66 gigawatts in 24 months

Josh:
that's crazy and then what it does to the old grid is the total u.s electricity

Josh:
demand it used to be one percent it is now climbing to three percent that number

Josh:
is going to continue to be up only so there's a

Josh:
increasing demand of these data centers it's not going anywhere in fact it's

Josh:
going straight vertical and an incapability of us to deliver

Josh:
on that demand with these existing infrastructure and you just you mentioned

Josh:
it's like crazy that we have to have all these permits and everything,

Josh:
but at least we have this system in place that allows people like Elon to come

Josh:
and buy these turbines and like solve the problem.

Josh:
So what's really cool now is this opens up this entire new world where,

Josh:
all right, the grid is kind of cooked, but we need electricity.

Ejaaz:
Yes.

Josh:
Who are the people who are most creatively solving this problem to get these

Josh:
data centers online as fast as possible?

Josh:
And that's where the money is going to be flowing. It's like,

Josh:
if you can create an electron of energy for cheaper than someone else,

Josh:
you could drop it the data center that's basically an infinite money glitch

Josh:
whoever can figure that out will get paid as much money as these large cap companies

Josh:
are able to fund because that is the single bottleneck that

Josh:
no one's seemingly been able to solve i mean we look at the gas turbines how

Josh:
long does it take just to get a blade from a turbine they're backed up for years

Josh:
with purchase orders so it's this really difficult challenge and that's where the focus is now

Josh:
Who's solving that challenge?

Ejaaz:
So who is solving that challenge? Maybe we should answer that question and get

Ejaaz:
into kind of like the companies that are both private and publicly traded that

Ejaaz:
might be solving the problem that we've just spent the last kind of 10 minutes explaining.

Ejaaz:
So now we've talked about the AI infra stack. There are many different layers

Ejaaz:
that previous episodes you should definitely tune in and check those out.

Ejaaz:
But within the power stack specifically, there are its own layers.

Ejaaz:
Now you mentioned earlier, Josh, that there are modular ways to approach it,

Ejaaz:
different types of companies, nuclear, you've got kind of like solar, those kinds of things.

Ejaaz:
There's also different quick fix ways to solve the power constraint.

Ejaaz:
And I'm going to run through a few, starting with layer one,

Ejaaz:
which I call the quick fix. That's what Elon just did.

Ejaaz:
He purchased a literal company for a billion dollars that creates these gas

Ejaaz:
turbines, places them on a trailer, like a trailer truck trailer,

Ejaaz:
and wheels them in to your data center.

Ejaaz:
A literal trailer, 18 million. A literal trailer, I'm not exaggerating here, right?

Ejaaz:
And they park it behind the data center. There's actually a term for this.

Ejaaz:
I was watching the All In podcast and they explained it very well.

Ejaaz:
It's called behind the meter. So this is kind of like a gray area where you

Ejaaz:
can kind of park it behind the official meter and power up that meter.

Ejaaz:
And technically it's legal. It's all good to do. And it's a fast way to power

Ejaaz:
on your GPUs, but there's a few issues with it.

Ejaaz:
Number one, you can't power up that many GPUs. He's got one gigawatt and his

Ejaaz:
data centers on average are gonna be scaled up to three gigawatts.

Ejaaz:
So there's still kind of like a fix. thing there, you can get it online in a

Ejaaz:
couple of days, which is great, but it only lasts for maybe like a six to 12

Ejaaz:
months. So it's not like a long-term solution.

Ejaaz:
Now, the layer below that, we start seeing names that are very popular,

Ejaaz:
at least in this ecosphere, which is called Bloom Energy. Now,

Ejaaz:
Bloom Energy has this thing called a fuel oxide cell. It's kind of like this

Ejaaz:
massive gigantic box that, again, is portable.

Ejaaz:
You bring it onto your site, similar to the gas turbines on a trailer,

Ejaaz:
but it converts natural gas into energy way more efficiently,

Ejaaz:
and it can last around four to seven years. Now, the reason why people are so

Ejaaz:
hyped up about Bloom Energy is because.

Ejaaz:
Typically, if you have to wait five to seven years to even get access to the

Ejaaz:
transformer, if you can get access to this early on, and it's kind of like a

Ejaaz:
medium term fix, four to seven years, you can scale your data centers way quicker

Ejaaz:
and maybe even train a frontier model way sooner than your competitors.

Ejaaz:
So that's what the likes of Meta and a bunch of data centers in Mexico are doing.

Ejaaz:
But there is an issue with this. And I want to find the specific tweet here.

Ejaaz:
Yeah, over here, Bloom Energy shares are trading lower after New Mexico regulators

Ejaaz:
rejected for the second time permits for a gas pipeline.

Ejaaz:
So the point that we were making earlier on this in the show is you can bring

Ejaaz:
these amazing fuel oxide cells, but it runs into the red tape issue,

Ejaaz:
which is we can't get access to permitting to be able to run these things.

Ejaaz:
So you end up facing the delay on its own. That's why Elon purchased his company

Ejaaz:
APR for a billion dollars.

Josh:
And GE for Nova has kind of positioned himself at the center of this trade.

Josh:
They produce the turbines and the grid equipment and the just stock has just

Josh:
continued to go up and up and up uh 300 in three years and it seems like they're

Josh:
taking orders all the way through 2031 so the revenue is very predictable in

Josh:
2025 their orders doubled year over year to 7.1 billion dollars and it's just this like

Josh:
unbelievable company where again similar to bloom energy if you can build the

Josh:
electrons they will come and as soon as you hit a wall there's someone else

Josh:
who who has the permitting who hasn't hit the wall and it looks like this company

Josh:
in particular is one that hasn't and And it's been this really nice, slow and steady growth.

Josh:
You haven't seen the crazy exponentials like an ETF like DRAM has.

Josh:
It's just slow, steady, really strong growth when it comes to building turbines,

Josh:
generating electricity, and getting the permitting required to actually put these things online.

Ejaaz:
I like to think of GE Vinova as the old staple of the power industry.

Ejaaz:
They've been around for a while, so they know how to deal with the old school

Ejaaz:
transformers, the high voltage types of things that you need to kind of equipment that you need to build.

Ejaaz:
Pioneer, they have all those supply chain relationships, but they also understand

Ejaaz:
the quick fix solutions that we mentioned earlier from the Bloom Energies,

Ejaaz:
from the APRs, and they also spin up and create gas turbines.

Ejaaz:
So if you look at the company and the clientele that they've signed,

Ejaaz:
We're talking about $7 billion deals with Microsoft.

Ejaaz:
We've got OpenAI being one of their primary customers. They're all in the process

Ejaaz:
of powering up a bunch of these companies' data centers. So the point is,

Ejaaz:
GE Vinova is kind of like the TSMC of power, dare I say.

Ejaaz:
And they've kind of been around, they've kind of proven their method,

Ejaaz:
and they're seeing consistent demand.

Ejaaz:
I think they're growing on average around 30% year over year.

Ejaaz:
But if I had to take a bet for this particular company, again,

Ejaaz:
not investment advice, I would say that growth goes exponential.

Ejaaz:
Over the next six to 12 months when people realize that you need power and energy

Ejaaz:
to bring these things online.

Ejaaz:
Now, the final rung of our stack that I'm showing you over here,

Ejaaz:
it says layer four, it talks about utilities and IPPs, but one thing that isn't

Ejaaz:
mentioned right now is the nuclear side of things.

Ejaaz:
And there is a company that we've interviewed the founder of.

Ejaaz:
And they're building kind of like the modular approach to nuclear.

Ejaaz:
Now, typically, if you look at any nuclear company, you're not seeing any of

Ejaaz:
these really come online until 2031 to 2035.

Ejaaz:
But Valor is an example of a company that is going to speed this up pretty significantly.

Josh:
Yeah. Also, just to clarify, an IPP, it's an independent power producer,

Josh:
which is a company that owns plants and sells electricity into the market rather

Josh:
than serving a regulated territory.

Josh:
And this is a really important distinction because

Josh:
Like we mentioned, selling back into a market is far better than having to deal

Josh:
with red tape. So you figure out the red tape on your own, you produce the power,

Josh:
and then you sell it back. And that seems to be the best way that these companies

Josh:
are kind of working this out.

Josh:
And in fact, larger companies have been working with these IPPs to lock in 10

Josh:
to 20 years of electricity at fixed terms.

Josh:
So Microsoft, for example, they have Three Mile Island, which I mean,

Josh:
for those who aren't familiar is a very old previously shut down nuclear reactor

Josh:
they brought it back online and their deal length is 20 years and they get 100 of the output so

Josh:
the time horizons on these are huge and it shows the

Josh:
the real scale of what this kind of power trend is going to look like over time

Josh:
where there's obviously no shortage of energy demand people are locking it up

Josh:
for decades at a time as if there was very long-term bonds because electricity really is

Josh:
a form of currency now it's like if you if you can get the electrons you could

Josh:
power on the intelligence you could serve the tokens you can make money and in a way

Josh:
earning 20 years of electricity getting that lockdown is is more powerful than

Josh:
issuing like a 20-year bond who can give you three percent because you can create

Josh:
a lot more upside with that energy so this is an important trend that i think

Josh:
we're going to be following as well it's just seeing

Josh:
What companies are able to lock up guaranteed energy for a really long time

Josh:
and the nuclear opportunity like you mentioned is so cool it's just a little early.

Josh:
No one's quite got them online yet. No one has figured out the permitting.

Josh:
It's not there, but man, when that comes online, that's gonna be huge.

Ejaaz:
You know, as we talk about kind of like the...

Ejaaz:
The structure of these energy and power companies and the deals that they're

Ejaaz:
starting to sign, but it hasn't been really abundantly signed just yet.

Ejaaz:
It's not really guaranteed growth rate.

Ejaaz:
It's a little bit murky. People aren't really sure if this is going to be the

Ejaaz:
next trade. You know what it reminds me of?

Ejaaz:
It reminds me of the memory trade before it became the memory trade.

Ejaaz:
Before they started signing massive long-term agreements and price hikes of 300% to 500%.

Ejaaz:
It sounds exactly the same. You know, history doesn't repeat, but it rhymes.

Ejaaz:
And I'm sensing this for the power trade as well. People don't really know about GE Vinova.

Ejaaz:
Maybe people in the comments are gonna say like, hey, like, you know,

Ejaaz:
I'm an old schooler here and I have heard of it, but like most people don't,

Ejaaz:
and they don't understand the importance.

Ejaaz:
It's a very different type of problem. Like with memory, it's easy.

Ejaaz:
It's like kind of like memory, okay, you need to remember context about everyone.

Ejaaz:
I want the AI to remember me, cool.

Ejaaz:
But power, it's kind of just like, yeah, can't you just get the electricity?

Ejaaz:
Don't we have like an abundance of electricity? And it's a much more nuanced problem.

Ejaaz:
And I think people are now only starting to unpack what that investment sector

Ejaaz:
might actually look like. So brings us to the question,

Ejaaz:
bull and bear case josh um i think you should go first what is your are you

Ejaaz:
bullish or bearish about this uh this power trade over the next let's say six

Ejaaz:
to 12 months and then like three to five.

Josh:
Years yeah i'm bullish on the power trade till the end of time i think like at the limit

Josh:
electrons are more valuable than dollars and i think this continues to be true

Josh:
for basically infinity there has been a singular trend throughout all of history

Josh:
where more energy equals more productivity, equals more innovation,

Josh:
equals more prosperity.

Josh:
And the more electrons you could throw at a problem, the better the success outcomes become.

Josh:
And this seems like a one-word trade forever. In terms of these swing trading

Josh:
things that are happening, I don't know. I mean, memory was the first trade

Josh:
of the first half of 2026.

Josh:
And it's ironic that kind of peaked the same week that SK Hanex listed on the

Josh:
NASDAQ. And now the question is, like, what is the next scarce input everyone's running to?

Josh:
Elon kind of answered it with his billion dollar acquisition.

Josh:
He said, hey, it is electricity, it is electrons, go do this.

Josh:
So in terms of short term, seems good. In terms of long term, seems amazing.

Josh:
Medium term, who knows, but I think the demand for electricity is up only forever.

Ejaaz:
Okay, that's pretty bullish. I'm afraid to say that I'm also equally as bullish.

Ejaaz:
I'll give you a few different reasons as to why.

Ejaaz:
Number one, I love that this layer of the AI infra stack is completely agnostic

Ejaaz:
to whatever your model is, whoever created the model, and most importantly,

Ejaaz:
which country created the model.

Ejaaz:
A big topic of debate over the last week is China versus the USA.

Ejaaz:
Hey, China just released an amazing open source model, the largest ever,

Ejaaz:
2.8 trillion parameters, Kimi K3.

Ejaaz:
And it's now the case that over 56% of tokens, at least on OpenRouter,

Ejaaz:
which is an open American platform, is being spent on Chinese open source models.

Ejaaz:
So the big question is, should we allow people to use these open source models?

Ejaaz:
And does it matter that they're not using an American-based model?

Ejaaz:
Well, you know who isn't worried?

Ejaaz:
Jensen Huang, who creates GPUs that power all these different types of models.

Ejaaz:
And you know who doesn't care below Jensen Huang?

Ejaaz:
It's all the people that are helping power and energize all these GPUs.

Ejaaz:
It's going to be the same case. It doesn't matter if your model is open,

Ejaaz:
whether it's cheap, whether it's expensive, whether it's Frontier, whether it's not.

Ejaaz:
The point is you're going to need energy and you're going to need GPUs to do

Ejaaz:
this. It's a commodity that is going to be required regardless of the situation

Ejaaz:
or geopolitical situation as is.

Ejaaz:
Now, when we talk about energy in general, we can't talk about Elon purchasing

Ejaaz:
APR and also Elon launching data centers into space to literally harness the energy of the sun.

Ejaaz:
He's been the biggest proponent of energy harnessing for a while now,

Ejaaz:
and he's taking two different approaches on the ground.

Ejaaz:
He's purchasing companies like APR for short-term fixes, but he's also,

Ejaaz:
in his long-term plan, aiming to.

Ejaaz:
Harness one of the largest energy sources in our galaxy.

Ejaaz:
And so if that doesn't show you how bullish people are on the future demand

Ejaaz:
of energy, I don't know what will.

Ejaaz:
So I think this is just going to be a growing trend that people are going to

Ejaaz:
become more amicable to like they did with the memory trade over the next couple

Ejaaz:
of years. And you just need to sit tight.

Josh:
And that is the episode on the state of energy, the state of power,

Josh:
the state of electricity, where the possible next trade is going

Josh:
again as always not financial advice i don't even own any of this stuff here

Josh:
although i probably should

Josh:
but it's just interesting it's exciting to talk about and it feels directionally

Josh:
correct at least so now you have an understanding of loosely how things work

Josh:
why it is so important and why a lot of people are equally as excited

Josh:
about this opportunity if you enjoyed this episode please do not forget to share

Josh:
with a friend with a family member who might also enjoy maybe electricity maybe

Josh:
one of the other episodes that we've recorded this week

Josh:
if you liked it please don't forget to rate us five stars on your favorite podcast

Josh:
platform where you get your podcasts.

Josh:
And yeah, is that everything? Anything else you just before we let

Ejaaz:
People go here? The final call is Limitless has gone independent.

Ejaaz:
We are keeping the lights on at home and we would love to look for a partner.

Ejaaz:
So if you are someone that has a product or service, or if you know of someone

Ejaaz:
that has a product or service that would be amazing to share with our Limitless

Ejaaz:
audience, please reach out.

Ejaaz:
Email us in the description below or reach out to us on X. But that should be

Ejaaz:
it. And we will see you folks on the next one.

Josh:
See you next time.