Ed Elson is joined by Ed Zitron to break down Meta’s move to sell its excess AI capacity and why it’s a bad sign for the AI bubble. Then, Melissa Murray joins the show to discuss the Supreme Court’s latest decisions and what they mean for the future of the country. Finally, Ed gives his take on Trump’s personal financial disclosures. Ed Zitron is the author of the Where’s Your Ed At Newsletter, and the Better Offline Podcast. Melissa Murray is a professor at NYU Law and co-host of the Strict Scrutiny Podcast. Subscribe to the Prof G Markets Youtube Channel Check out our latest Prof G Markets newsletter Follow Prof G Markets on Instagram Follow Ed on Instagram, X and Substack Follow Scott on Instagram Send us your questions or comments by emailing Markets@profgmedia.com Learn more about your ad choices. Visit podcastchoices.com/adchoices

The AI Trade Just Got A Warning From Meta

Prof G Markets

# Full Transcript

**Podcast:** Prof G Markets

## Transcript

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[SPEAKER_02] Welcome to Prof G Markets. I'm Ed Elson. It is July 2nd. Let's check in on yesterday's market vitals. The Dow was roughly flat to start the third quarter. Meanwhile, chip stocks dragged the Nasdaq and the S&P 500 into the red. Brent crude dropped as the U.S. signaled talks with Iran were productive. And the yield on 10-year treasuries rose after Fed Chair Walsh said inflation was, quote, too high. Okay, what else is happening?

[SPEAKER_02] The cloud computing industry has just gained an unexpected new arrival. Meta is reportedly planning a cloud business to sell its excess AI capacity. The company has poured billions into its AI infrastructure. And until now, Meta has maintained that all of those investments and the resulting compute capacity would be used for internal purposes. But clearly now, something has changed.

[SPEAKER_02] Meta stock closed up nearly 9% on the news. But other NeoCloud compute providers such as CoreWeave dropped on this news. So, for more on why Meta is getting into the compute game and what it means for the rest of the AI industry, we are joined again by Ed Zittrain, author of the Where's Your Ed At newsletter and host of the Better Offline podcast. Ed, good to see you.

[SPEAKER_02] I'll just start with the good news on my end, because for those of the listeners who follow me on social media, I actually bought Meta last week, and it's up 10% since then. So, technically, I'm happy because my view was that the price was pretty cheap relative to the rest of tech and relative to the S&P. So, that's the good news.

[SPEAKER_02] Bad news potentially is we thought that Meta was going to build their own AI products. Now they're saying, no, we're going to sell the compute to someone else for someone else to build their AI products. And that's why I wanted to talk to you, because it doesn't seem like a great signal for the AI...

The AI Trade Just Got A Warning From Meta

Transcript

Built for investment professionals

Every day you wait, your competitors are finding
edge in conversations you're not hearing.

The AI Trade Just Got A Warning From Meta

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.