the nvidia 2.0 $100b EXPLOSION

Well, it's official. Nvidia is expected

now to invest over a hundred billion

dollars directly into OpenAI, and

OpenAI's nonprofit will maintain

control. This is leading a lot of people

to question, wait a minute, is this all

just the circular bubble, or is this

Nvidia doing what they should be doing?

Well, let's take a look at some of the

Nvidia numbers here really quickly, just

so you can understand how a hundred

billion investment into OpenAI looks.

Mind you, a hundred billion dollars into

OpenAI

in order for OpenAI to invest more into

data centers and NVIDIA chips is pretty

circular, right? Nvidia takes profits

and then they could buy back stock,

which they do. They regularly buy back

stock. Their outstanding stock keeps

going down, which is great for existing

shareholders. So then they buy back

stock, but then they use that money

potentially to go make investments that

are strategic by either making promises

to companies like Coreweave or making

investments into companies like OpenAI,

which is then used to go buy more Nvidia

chips. Remember last week we heard that

Oracle plans to spend $70 billion over

the last, you know, 6 months plus 18

months, so that 2-year period. Uh so

over two years they plan to spend $70

billion. They expect that 59%

of that $70 billion will go to Nvidia

chips. Understand for a moment just

those two companies, Oracle spending 59%

of $70 billion, that's $41 billion. Plus

OpenAI call it $und00 billion of

circular money. That's $141 billion.

Okay. Nvidia has revenue of about $46

billion in three months. So we've got

like almost a year of revenue that we

are creating

at Nvidia simply through OpenAI

uh OpenAI 100 bill this is you know

spread out over time obviously we'll

talk details in just a moment uh and

then the Oracle uh 70 * 59% $41 billion

right this is almost one year of revenue

just from those two it shows you the

magnitude

of of how large this open AAI deal is.

And this is why Nvidia stock is

rocketing right now. It's absolutely

taking off because people were going,

"My gosh, Jensen is literally taking

profits

and then getting Nvidia shareholders

exposure to OpenAI,

but whether or not that exposure

matters, they're basically funding the

very purchase of their own continued

revenue. So yes, it is circular. At some

point, it is very bubbly. But what you

find is people are making these

investments because of this belief that

artificial intelligence will continue to

be integrated into our lives in sort of

a an irreplaceable manner that it just

becomes so core to what we do. And when

we look at companies in the United

States, they're so much more primed to

adopt AI than in other countries around

the world. Why? And signal we have more

money. I mean, understand this for a

moment. China buys some AI chips, but

they only buy 10% of the world's

artificial intelligence chips. It's not

because they don't want AI. In my

opinion, it's because they don't have

rich people and rich companies. Like,

how many Chinese can blow 200 bucks a

month on a CH GPT Pro subscription

compared to how many Americans can do it

and not even notice a difference in in

their standard of living. The same is

true for Chinese companies versus

American companies. You have China that

just went through a terrible real estate

recession because of the bubble that the

the Chinese government popped up and

then they rugpulled uh their Chinese

real estate investors by changing the

very debt and leverage rules that they

were encouraging their builders to

undertake. This makes for a very hard

environment to do business in China.

This

is selling rich products to rich people.

the new iPhone uh you know with the

promise of oh we'll finally have some

more AI which is the same thing they

promised last year people buy it hook

line I do too I got it right here I got

the new watch I got the new like I get

it like we have we have cash and we're

like look even if it's incremental we

want a little bit more battery we want a

little bit more comput power we want

that artificial intelligence and I get

it more so now than ever before why why

do I understand that first of all it's a

big deal that Oracle and open AI. Just

those two things, this doesn't even

include Meta. This doesn't even include

Microsoft, mind you. They're spending

tens of billions of dollars on

artificial intelligence. Meta has a $20

billion deal in talks right now with

Oracle. And on top of that, OpenAI wants

to spend another hundred billion on

backup servers,

you know, to sustain sort of their

ability to provide uptime uptime.

Microsoft just last week committing

another $4 billion to another data

center in Wisconsin plus another 3.3 in

Mount Pleasant, Wisconsin uh coming

online later this year. Right? These

these are huge capital investments. Why

uh does this how should I phrase it? Why

is this all such a big deal for Nvidia's

numbers here? Because remember Nvidia

every quarter starts at zero. So you

need this continued willingness of

companies to keep throwing money at

Nvidia

and that's how you get Nvidia stock

continuing to show EPS growth. If you

look at Nvidia's EPS growth at just 20%

over the next call it four years on

average. They're only trading for a two

peg right now. Realistically Nvidia is

probably a $240 stock by year end. I

really shouldn't give away these things

from our alpha reports. Uh it's part of

our me Kevin membership. Sometimes that

just leaks out from me. But uh you know

I've got a big price target for Nvidia

by the end of the year and we've had it

for for weeks now in the course member

live stream. And look freaking rocket

ship right now. So you're not part of

the Meet Kevin membership yet. I guess

there's a a pitch to go check it out.

But uh understand that the American

consumer is willing to blow money on

just incremental increases in

productivity. And I get it. And the

reason I was going to say I get it is

because what we're doing right now and

this isn't supposed to be a pitch for

house hack but I want you to see the

relatability

when we're running models previously on

old generation Nvidia chips for house

hack we're looking at like 8h hour to

3day training time frames to get certain

MLS like smaller MLS that we're running

because we we have many different

segments we have we have many different

MLS that we run for our real estate AI

which We plan to start beta testing in

Q4 with course members uh and then we'll

probably expand to some kind of public

sale for real estate AI in Q1. We have

many MLS that go into that. Our compute

speed 5xed when we installed Blackwell

chips. So, we're like, "Oh my gosh, if

we're going to spend, you know, x,000 a

month on labor for research and

development on artificial intelligence,

why not spend that same amount on labor,

but get five times the output when the

chips are operating faster?" So, yeah,

how has has Blackwell chips and and we

actually think we're we might be turning

into more of an AI play than even real

estate. We're real estate backed. It's

obviously all real estate. Like we're

still like our company stock sells uh

you know the the fund raise we're doing

right now is just assuming a real estate

valuation. So assume this is not an AI

sales pitch because I'm not selling you

some AI valuation. I'm not selling you

any is like don't don't go invest in

house. I just think the shares are too

cheap. Uh one day we'll raise the

valuation maybe you know when we

actually start proving our our AI in

sales to people. But but you know then

the valuation could could 100x or a

thousandx if if it works out well. But

my point is for bringing this up as a

CEO not to make you know projections or

bullishness about house hack. I'm very

bullish about that. You know that. But

it's to show you that just like you and

I will buy the new watch to get that

extra battery life for a little bit more

speed because we could get that email

out faster. We could get, you know,

multiple tasks running at the same time

without the phone black screening and

pinwilling. I got that so much on the

iPhone 16. It was driving me nuts. Just

like we'll pay for that extra 15% A19

processing on our iPhone, you know, 17,

companies benefit massively from picking

up that latest iteration of a chip. So,

like if next year, for example, the

Blackwell chips we have right now,

we could get another 30% efficiency by

buying the next generation chip next

year, we'll probably do that because

we're getting so much more productivity

out of our labor in doing so. And so,

that's what keeps this flywheel going

right now is the actual results of

what's coming out with with that with AI

productivity is is good. At least, you

know, for our purposes, what we're

seeing, we know there are a lot of

companies that are just like chat GPT

rappers out there, and even they are

getting great valuations. I mean, look

at this. There's uh Meta spent $14

billion buying a data labeling company

that tells you if something's a highway

or not. Like, big deal. $14 billion for

that kind of data labeling company.

We're labeling, you know, interiors and

exteriors of of real estate in different

rooms and components of real estate.

Yeah. And it's like, wow, the valuation

of somebody's life highways and they're

worth $14 billion. I think it was scale

AI. That's crazy. So, the valuations are

crazy. And there are some things that I

feel like, you know, some of these chat

GPT rappers, like I think Nvidia just

invested $900 billion poaching the CEO

of some chat GPT rapper. Basically, it's

$900 million. It's insane some of these

valuations. And I agree that a lot of

these companies, just like MIT said, are

not profitable companies. And there is a

lot of froth and it's a bubble. It's a

cycle. We know that. We know there's

going to be overinvestment. But for

right now, these circular investments

from Nvidia, they keep it going, but

there's also there's so much hope in why

it makes sense to keep spending on these

chips. So like, as much as I want to

look at it and go, it's a bubble, it it

is to some extent. On the other hand, I

also as a recipient of the AI chips look

and go, "Oh my gosh, but the chips are

better. They are good. It's like they

make sense. The upgrade cycle makes

sense." And the one thing that Nvidia

probably doesn't have priced into it

right now is people are the people who

are not investing in video are worried

that Nvidia always starts at zero.

People are not pricing in an Nvidia

upgrade cycle that happens at an annual

cadence. This is what Jensen started

trying to tell us about 6 months ago

that don't think about this as starting

at zero every time. Think about

companies saying no no no we want that

extra 20% step improvement just like you

get that with that iPhone every year

that extra 20% battery life and

efficiency. The same thing with chips

and you can still make use of the old

ones. This is what's so valuable here in

Nvidia. And Nvidia, mind you, with this

OpenAI partnership,

uh, is only committing to make the

investment of hundred billion in

portions as they invest in the

deployment of gigawatt systems with

OpenAI. So, let me rephrase that. The

strategic partnership is deploying 10

gawatt of Nvidia systems over the next

period of time. Nvidia is only going to

invest 10% when the first 10% or the

first gigawatt is deployed. So they're

basically doing for every gigawatt,

you'll unlock 1% of an investment for

us. So we'll basically give you $10

billion to go build a $10 billion

gigawatt facility and then we'll invest

$10 billion into your company, right?

And and then that is being used to go

buy more Nvidia chips. Jensen is the

most brilliant circular kind of

salesperson here because he's doing

exactly what you should be doing. You

should be going to these companies doing

whatever you can right now to keep the

cycle going. And frankly as much like a

Ponzi implies that there's no underlying

benefit

and I get that cuz it's circular

but again at house hack I see that

underlying benefit firsthand and I get

it as a consumer with AI products. Plus

we also have to conf consider remember

how artificial intelligence products are

getting more and more integrated into

our daily lives. People forget that

Nvidia is also an FSD play. You know,

it's a robo taxi play with their Nvidia

drive platform. I can't remember if

they're on Thor or Our right now, but

VADA infrastructure for coding plus

Nvidia infrastructure for basically

creating a product that any vehicle

company can license. Anyone can license

whether it's Neo, whether it's Mercedes

or whatever, any of these companies can

license Nvidia's AI platform to create

FSD and to start catching up to Tesla.

You know, they all have a lot of

catching up to do, but it's beyond that.

We create more and more AI purposes on a

daily basis with these products. I know

people like they they make fun of the AI

goss, oh, I don't want Mark Zuckerberg

in my living room or or whatever. Uh,

and I get it. But the more we have these

AI potential enabled products, which the

AI on this is absolute trash right now,

okay, trust me, it's like totally trash.

But it'll get there. And the more we get

to where we're looking at, wow, okay,

yeah, smart glasses or smart rings or

cars or laptops, PCs, whatever, all

integrate inherently AI, the more demand

there is for these AI chips. I mean, I

think it's incredible that I could have

that firsthand experience of of sitting

and playing with my kids uh and not have

to worry about holding a camera to film

my kids, right? And I've got the

opportunity to film them with these very

glasses I'm wearing. So, I like before I

go play with my kids, I put the glasses

on on purpose and there's no

distraction. Like they don't feel like

like here I got a child on me, you know,

playing with my watch. That's all she

wants to do is play with my watch while

at the same time there's chaos over

here. Like these are the things that in

the future AI just edits together for

us. Like who actually goes through

uh their you know old footage of of you

know things that they filmed or captured

with their iPhones or or their glasses

or you know whatever which the more we

film with glasses the more there is to

edit, right? Who goes through all that

stuff? Nobody goes through all that

stuff. Like most people aren't video

editors who are going to go through all

of this, right? Uh but what's crazy is

over time, the editing will all be

outsourced to automatic insights

provided by artificial intelligence. And

a lot of that is just going to be driven

on these AI data centers, whether

they're Nvidia or OpenAI or whatever.

I'll give you an example. When I went to

Japan, you've all heard I went to Japan.

News. When I went to Japan, I uh I had a

360 camera while I went on a ride with

uh the kiddos. And I go on this ride and

AI, you can follow me on Twitter if you

haven't seen it yet, real meet Kevin. It

was super hot, so I'm sorry. I'm like

barely wearing clothing here. But the

point is this whole video that you see

is AI. Well, like the footage is 360°

footage that I filmed by holding the

little stick, right? But AI edited this

entire 32 second clip. All of the

angles, the color grading, the scenes,

all of it. AI. Watch this. I'm going to

play this for 32 seconds here. I like I

go point at something and then it's it's

videoing it. comes back to Max, Lauren,

Jack, myself.

All this people waving at the character

over here, the scene cuts, what to cut

out, what to keep this zoom in right

here. Dude, that was all AI. I didn't

tell it to do that. Picking up this

scene over here and this ride or this

ride. This all AI edited. I did nothing

other than film it. And so in the

future, you know, we're just gonna have

the like as which is already here. We're

filming it all on our on our phones or,

you know, whatever our glasses or

whatever, which I guess is the perfect

spot to put up my Meta uh, you know,

affiliate code. You get $30 off if you

get the Meta Glasses, you know, and all

it gets AI edited in the future. We're

actually creating more demand. that

might not be profitable right now for a

lot of these companies, but it's it's so

functional uh for as a consumer or as a

user. I couldn't be more excited about

this kind of stuff. I just flip it

through. Oh, by the way, shout out to uh

the Cybert truck. By the way, yesterday

I took this picture with my meta

glasses, by the way. Yesterday I um I

took the Cybertruck to Lowe's a few

times and I had to get this 12T 2 by6 on

my on uh in the car back home. Uh, and

so I ended up using uh the Cybert trucks

rack that I added on top and just bungee

corded it on it. I think it looks pretty

good. The black on black. Uh, I think it

looks awesome. So, I was really excited

about the functionality there of the

Cyber Truck. But, but anyway, the point

is this is what we're seeing with this

AI boom right now. Now, let's listen for

a moment to to what we're seeing the

Coreweave CEO say. He had an interview

on CNBC this morning with Sarah Eisen

and uh you know quick note also on

Nvidia because you know me and the

balance sheet

>> Kevin is much more interested than most

people by the way in the balance sheet.

>> Uh I am a big big big big big big fan of

the balance sheet. There's nothing to

complain about at Nvidia. It is so damn

good. They have so much money. So it

doesn't even matter that they're

investing 100 bill into OpenAI. The 100

billion to open AAI is a rounding error

basically for Nvidia because they're

their profit margins are so high.

They're bringing more than 50% to the

bottom line. It's it's just it's insane.

It's it's incredible. Now, what matters

heavily uh is that

when we look at

cash flows from Nvidia, we have to ask

what is the money being spent on? If

they're just issuing it all out as

dividends, goes back to investors.

Great. That's fantastic.

But does it keep the cycle going? Maybe

not.

On the flip side, if people want to sell

some of their stock, they can. But what

are we getting out of Nvidia? Nvidia is

saying, "Hey, hundred billion into

OpenAI, not taking a controlling

interest. Open AAI worth $500 billion

right now. That's like one of the

company. Nvidia is paying 38 times sales

for this. So they're not getting a

discount on uh OpenAI as far as we're

aware and you know there are concerns

like SoftBank promises to invest $500

billion over four years yet they're

laying off people in their venture fund.

So that's sort of like all right you

know what's actually going on. I don't

know but I at the same time which has

been killing it since we've been

venturing it on the channel 23,000 AI

chips now and they say they have

capacity for 60,000

black wheel chips. The more I Ren stock

goes up, guess what? The more money they

have available to go buy more Nvidia

chips. So

circular in nature without a doubt. Does

it make money? Yes. So here's Nvidia,

you know, now at 183. But look at Iron

for example. Iron's up 7% today. So a

lot of these companies, let's look at uh

Coreweave. Core is up 5% right now.

Look, breaking above the 125 line. A

critical line. This line has been so

critical. We've been we've been playing

this and setting up alpha report trades

on this on almost a daily basis. It

feels like it feels like maybe probably

like twice a week we talk about four

weeks and we're like that 125 line. Look

this morning we reject it again. We

bounce on it again. Now we're breaking

out over it probably because of this

Nvidia deal. But let's listen to the

core weave CEO and let's listen to see

what comments he has and we'll add our

own commentary.

>> Good to have you here. Fine. Well done.

So, so we were in these talks sort of on

the sidelines of the UN General Assembly

about how governments can work with

poor.

>> Those lines, by the way, are all Weeble.

If you want to get a 2% balance

transfer, go to meet.com/weble.

Uh you can go to meet Kevin.com/meta for

the $30 on the meta glasses. Meet

Kevin.com/life.

If you want life insurance in as little

as 5 minutes. Really good, by the way.

Highly recommend you have it, especially

like while you're younger. Lock it in.

paid promotion,

>> right? And they're all sponsorship.

>> You also just fresh off of this trip

with President Trump to the UK

announcing all these deals.

>> All right, get to it. I want to hear the

comments. Here we go.

>> Thank you for having me. And I I do

think that uh both of these nibbings uh

really highlight um the realization that

when you're u building a planetary scale

infrastructure that's really required to

allow artificial intelligence to to to

to reach its potential that you are

going to have to plug into really all of

the resources uh that are available and

those are private sector resources uh

and those are public sector resources.

the the uh the meeting yesterday, the P3

meeting. Um it was a wonderful

opportunity for exchanging of ideas. Uh

the opportunity to be with the uh the

president and the prime minister in the

UK. Once again, uh just an incredible uh

opportunity to kind of uh bring together

different constituents uh that have

different tooling that allows for

the mobiliz Oh, Meta killed the $30 off

from Oh, Dude, that's lame. Are you

serious? Hold on. Let me see if there's

a new one. Why would they kill it? It

was It was doing so well. So many people

were getting it. Hold on. Let me see if

I can get you a new one. I I'll I'll

look right now if I can get a new one.

Uh while we listen to this, okay, I'll

try to get a new one. Uh give me, you

know, 30 seconds to sort of figure it

out.

Uh of the order of the magnitude of

capital that's required to allow this uh

uh buildout to occur.

>> What what is that? How big are we? So,

so I I think a big uh one of the things,

one of the narratives out there is that

keeping these incredibly large deals

being announced by uh uh um the the the

AI labs by by the hyperscalers uh by uh

the Neo clouds and you know incredible

uh indication of the scaling.

>> Uh no, there's a limit to how much you

can get on a referral so you have to ask

for somebody else. Damn, Beta you guys

are so dumb. I show you guys on a daily

basis and now you screw up the link

because like I don't have like a contact

at Meta, you know? I This was just from

the app and it's like, "Oh, you've maxed

out your referrals." It's kind of like

with Tesla, like my Tesla referral link,

it's maxed out. And I'm like, you guys

are so dumb

>> the demand. But what it does not do is

it doesn't really speak to all of the

things that need to happen and all the

investment that needs to occur in order

to uh provide an environment where these

investments in the data centers and the

supercomputers and and I'm talking about

this. So far he said nothing. This is so

damn s like say something already

person. It's everything from energy

exploration uh exploration

uh through um uh you know uh power

generation through

>> okay we know we know all this so

somebody here is complaining about the

coupon code the thing okay look really

quickly yes the coupon code expires but

the thing is the price goes up so that's

the whole point it's like we lock people

in at lower prices and then that way if

you got the knee Kevin heaven membership

for, you know, $400 effectively, you

know, in 2017, you know, uh, and now

it's $1,400 or whatever. Like in the

future it'll be even more. That That's

why. So, like when you hear, oh,

expiration or whatever, the price just

goes up

uh transmission uh all the way through

the data centers and ultimately up and

through the supercomputers to the to the

to the to the models and to the

application layers. And so, um,

>> okay, get to the point. It's it's

trillions of dollars and and you really

are rebuilding one of the fundamental uh

u um components of what the economy I'm

surprised this interview so far not a

lot of substance

like okay we've heard before yeah

trillion dollars redo everything I get

it like I'm about to turn this guy off

although they do have that MSA with

Nvidia you got to give them credit they

have the material service agreement with

Nvidia

and that material service agreement the

details of which we expect to get on

November 12th are going to be huge

because it's basically Nvidia's you know

conf like Nvidia's claim that they will

buy back excess data set or capacity and

that's big you know that basically

shifts the bag holding from coreweave to

Nvidia or generation is different than

what we saw in the docom the dotcom was

a bolt-on to the existing infrastructure

this requires really a a a new layer

because you're talking about a step

function and power consumption because

the computer powerful. Um the the uh um

you know it is a debate that goes on in

many circles like is this as as the

represents on the same order of

magnitude greater or lesser than uh you

know the advent of the internet and and

and

I believe that you know over the long

term you don't get to put these things

in in a pecking order. All you get to

say is this will be one of the seinal

technology buildouts and one of the

seinal technologies of our future.

That's why it was so interesting to

listen to the president address Jensen

in that room and say I hope you're right

because the commitment to get it made is

much different than it was in in the

'90s.

He so far has said nothing. This is a

waste of time.

Somebody says, "Yeah, getting Kevin's

course. One of the best decisions I

could have made a few years back. Very

proud to be in the group." Oh, thank you

for that. Yeah, it's interesting. You

know, the um what's it called? Uh

there's somebody else who g who donated

$20 or just going like, "Oh, you know,

basically, you know, been a course

member since 2021. Great decision. That

was really nice.

>> I I think um you know, there there's

there's a another narrative out there is

like, are we in a bubble?" And that's

that's that's come up again and again.

And then I'm sure if I you know kind of

sat here long enough you guys would ask

and and given the sums we're talking

about it's not an unrealistic question

to ask because is that capital going to

actually sign. So so one of the things

that's incredibly important to

understand here is that

the overwhelming majority of the compute

that's being built right now is being

built to serve inference.

Inference represents the monetization of

artificial intelligence. It is I don't

know. Okay. There's training and there's

inference. We get it. Inference, he

says, represents the monetization of AI.

Do I agree with that? I guess so.

Because like for example, with House

Act, we're doing all this training. Uh

we don't we can't monetize training. We

can only monetize inference. you know,

when somebody like what we want is we

want you to be able to open our software

and me tell you if a property you're

looking at is a good deal or not. And I

think that lets us charge money that

that creates value for people, right?

And when you create value for people,

you could charge money. So I guess he's

right. Inference is the monetization

component. Okay. All right. All right.

All right. because

the hyperscalers that are serving

clients are being paid to build this

infrastructure to serve their current

demand and their projection of demand.

And so just because a lot of money flows

into a particular portion of the economy

doesn't imply that it's a bubble. What

it is implying is that there is

tremendous broad-based demand across the

technology space as the society. I mean,

yes, I agree that right now there is

broad-based demand and and it just keeps

getting fueled. So, there's no sign of

it hopping, so to speak. This is true.

As the uh enterprise businesses begin to

integrate that into their uh uh

workflows and it's just, you know, I I I

think that everybody jumps to the

concept of is this a bubble? Um because

they they just see these vast sums and

they're like, "Oh, it must be a bubble."

And I just think you got back to why is

the money flowing there and is it being

supported by commercial activity,

>> right? Well, I don't know that we all do

that and in part I mean the companies

that are deploying this C. Okay. All

right. I I mean like you know not a lot

of substance in that CNBC interview have

to say I think CNBC did a bad job on

that but that's okay. It's CNBC so take

it for what it's worth. Uh but

I think his his point of view is right

on that inference is the monetization

cycle. Now the biggest argument that

people have especially like MIT is that

so much money is being invested in AI

but so so little is coming out of it.

Does it just take more time? Maybe you

know that so so we'll see. uh can can AI

be productive enough to uh to to

actually be monetizable uh you know more

so than than the investments that are

being made to where you're actually

getting a return on your investment

rather than even just some portion of a

return of your investment. We'll see.

But broadly, I think this is useful

because you have to remember that Nvidia

right now is only trading for I mean

barely a two peg, barely a two peg on

this stock. And

to me, uh, a company with these margins

and the size of the pricing power they

have, here's Weeble again, bow transfer

2%.

Meet Dear Weeble. uh they are

they're not fully valued on just a basic

PEG ratio basis.

So we'll see that's my take on what's

going on with Nvidia knows about this.

>> We'll we'll try a little advertising and

see how it goes. Congratulations, man.

You have done so much. People love you.

People look up to you.

>> Kevin Pra there, financial analyst and

YouTuber. Meet Kevin. Always great to

get your take.