> ## Content Index > Fetch the complete content index at: https://cadenceletters.com/llms.txt > Use this file to discover other available public pages before exploring further. # Who Pays for the AI Buildout? - URL: https://cadenceletters.com/en/who-pays-for-the-ai-buildout/ - Published: 2026-10-25T01:03:26.000Z - Updated: 2026-10-25T02:56:39.000Z - Description: The companies building data centers look really exposed, while Samsung, SK hynix and Nvidia are making a fortune. In the end, the AI companies have to earn the money that pays this whole chain back. - Author: Ryan Sungho Kim - Tags: en, signal, ai-frontier, #pair-2026-10-25-signal-neocloud Look at Oracle, look at CoreWeave. The companies building data centers right now look really exposed. CoreWeave's stock fell 38% in October alone, and its bonds yield over 15%. Meanwhile Samsung, SK hynix and Nvidia are making a fortune. Samsung just posted ₩107 trillion in preliminary Q3 operating profit. I think this is basically supply and demand. Chips and memory are short, so prices go up, and the chipmakers were the first to turn that demand into money. The cloud companies in the middle buy those expensive chips and rent them out on multi-year contracts. In a way, they're the ones taking the hit to keep up with AI. So who pays all this back? If you follow the money up, it's the AI companies. Take Anthropic. The FT reports it's raising $60 billion to buy Google TPUs, and Blackstone is negotiating to take half of the $18 billion junior tranche at more than 10%. A borrower with a similar credit profile usually pays around 7%, so that's expensive money. Its draft IPO filing, as reported by the WSJ, shows about $450 billion of compute contracts over the next seven to ten years that mostly can't be cancelled. Q3 revenue was $16.8 billion. So the AI companies have to earn the money and bring it back to these people. And that money has to come from the companies using things like Claude. Ken Griffin at Citadel said exactly this: every company is looking at its Anthropic and OpenAI bills and asking how much productivity it's actually getting. I do think the demand is real. Andy Jassy says Amazon's capacity for this year is sold out, 2027 is mostly sold out, and a good chunk of 2028 too. But even Jassy says inference has to get about ten times cheaper before AI gets into the core of how companies work, and that takes five to seven years. The debt is being taken on now at over 10%, and the money to pay it back comes in over five to seven years. It's less that the business is bad and more that the short-term cash flow is the problem. So here's what I've been imagining. The chipmakers may have no choice but to keep propping up the neoclouds. If these companies go under, GPUs flood the used market, and the chipmakers' margins get hit too. Nvidia is already doing it: it has promised financial firms up to $125 billion in residual value guarantees on GPU financings. If used GPUs lose value, Nvidia covers the difference. It reminds me a lot of crypto mining. In 2017, when coin prices went up, mining farms bought GPUs like crazy (GPU mining back then was mostly Ethereum). In 2018 prices broke, the farms started dumping their GPUs, and that November Nvidia cut its outlook because of unsold chips. The stock dropped 17% in a day. The funny part is that CoreWeave, the most shaken company today, started in 2017 as an Ethereum miner. Mining farms lived on the coin price. I think AI clouds live on the token price. Inference keeps getting cheaper, but so far usage is growing faster. Anthropic's Q3 revenue was up more than 40% from the quarter before. If token prices ever start falling faster than usage grows, that could be the 2018 moment. And if the neoclouds, big tech and the whole AI trade really break, that's such a bad signal for the US that I think Washington steps in somehow. I just don't know how they print more money at these rates. The 10-year Treasury is around 5%, and CoreWeave's bonds are over 15%. Print money and prices go up, and you probably get another asset bubble. The US would also close its doors further. They'd only go there if a shock left no other answer, but I keep that scenario in mind. What I'm watching: SK hynix (October 28) and Samsung (October 29) results, how much backlog Amazon shows in its Q3 report (October 29, US time), next week's Fed decision, and Anthropic's IPO, reportedly as early as November. Not investment advice or a price call. The numbers are from the sources below; the reading is mine. ## Sources - [Yonhap: Anthropic offers 10%+ yield on junior bonds (FT report, Korean)](https://www.yna.co.kr/view/AKR20261019023800009?ref=cadenceletters.com) (Oct 19, 2026) - [AA: Anthropic could spend $750B on computing power (WSJ report on the draft prospectus)](https://www.aa.com.tr/en/world/anthropic-could-spend-750b-on-computing-power-ahead-of-ipo-report/4095143?ref=cadenceletters.com) (Oct 20, 2026) - [Quartz: Anthropic told investors Q3 revenue reached $16.8 billion (Bloomberg report)](https://qz.com/anthropic-q3-revenue-adjusted-profit-ipo-investors-101526?ref=cadenceletters.com) (Oct 14, 2026) - [Yonhap: Citadel CEO says we are "almost certainly" in an AI bubble (Korean)](https://www.yna.co.kr/view/AKR20261021031300009?ref=cadenceletters.com) (Oct 21, 2026) - [a16z: Amazon CEO Andy Jassy on the Infrastructure the AI Era Needs](https://www.youtube.com/watch?v=-YMMRQ1qscI&ref=cadenceletters.com) (Oct 23, 2026) - [CNBC: Nvidia's role as AI financier faces first big test as neoclouds take market hit](https://www.cnbc.com/2026/10/24/nvidias-role-as-ai-financier-faces-first-big-test-as-neoclouds-take-market-hit.html?ref=cadenceletters.com) (Oct 24, 2026) - [Reuters: AI credit worries send default insurance to record high](https://www.reuters.com/business/media-telecom/global-markets-cds-ai-urgent-2026-10-15/?ref=cadenceletters.com) (Oct 15, 2026, Oracle CDS at a record) - [CNBC: CoreWeave credit default swaps hit distress levels](https://www.cnbc.com/2026/10/15/coreweave-credit-default-swaps-hit-distress-levels-as-investors-sour-on-ai-debt.html?ref=cadenceletters.com) (Oct 15, 2026) - Share price: [Yahoo Finance CoreWeave](https://finance.yahoo.com/quote/CRWV/history/?ref=cadenceletters.com) ($87.12 close on Sept 30, $54.24 on Oct 23) - [YTN: Samsung Q3 preliminary operating profit ₩107 trillion (Korean)](https://www.ytn.co.kr/%5Fln/0102%5F202610080945200200?ref=cadenceletters.com) (Oct 8, 2026) - [Reuters: 'Crypto hangover' hammers Nvidia's outlook, shares drop 17 percent](https://www.reuters.com/article/technology/crypto-hangover-hammers-nvidias-outlook-shares-drop-17-percent-idUSKCN1NK2ZF/?ref=cadenceletters.com) (Nov 15, 2018) - [CNBC: CoreWeave's 7-year journey to IPO wound through crypto before AI](https://www.cnbc.com/2025/03/30/coreweaves-7-year-journey-to-ipo-wound-through-crypto-before-ai.html?ref=cadenceletters.com) (Mar 30, 2025) - [Federal Reserve H.15: 10-year Treasury yield](https://www.federalreserve.gov/releases/h15/) (Oct 16–22: 4.96–5.15%)