“The past is never dead. It’s not even past. All of us labor in webs spun long before we were born, webs of heredity and environment, of desire and consequence, of history and eternity.” William Faulkner, born 25th September 1897

I don’t think investors fully understand the scale of what is happening here. 👉 Based on a WSJ story The AI buildout is on track to become the biggest economic bet in U.S. history. Not the internet. Not highways. Not electrification. Not even the railroad boom. AI. The WSJ estimates that U.S. data-center and AI infrastructure investment could reach $10.3 TRILLION between 2025 and 2032. That works out to roughly 3.6% of GDP per year. For perspective, the railroad boom averaged about 2.2% of GDP. Highways were roughly 1.1%. Telecom and fiber were also around 1.1%. That alone is incredible. But I think the charts underneath the headline are even more important. The five hyperscalers at the center of this buildout - $GOOGL, $AMZN, $META, $MSFT and $ORCL - are expected to spend roughly $4.2 trillion in the four years ending in 2029. That is no longer normal corporate CapEx. It is large enough to reshape the economy around it. And you can already see that happening in construction. Through July, private U.S. data-center construction spending was running about $9 billion above the same period last year. Meanwhile, private construction spending on basically everything else - houses, apartments, shopping centers and more - was about $46 billion BELOW year-ago levels. That chart is remarkable. Data centers keep going up while almost everything else rolls over. To me, that is where this becomes much more than an AI story. Hyperscalers are now competing with the rest of the economy for electricians, construction workers, transformers, turbines, land, natural gas, water and power. The WSJ gives a perfect example. Mississippi was in the running for an aluminum smelter that could have created roughly 1,000 permanent jobs. Then a data center was announced near one of the proposed sites and tied up electricity the smelter needed. The smelter went to Oklahoma instead. That is what crowding out looks like. And it is not just power. Data centers are also pushing up land costs, pulling skilled labor into the buildout and creating shortages across parts of the equipment supply chain. Then there is inflation. Import prices for computers, peripherals and semiconductors were roughly 20% higher year-over-year in August. That matters because the AI boom is not happening in some isolated corner of the economy. It is bidding up the price of labor, equipment, electricity and capital at the same time. And then there is the wealth effect. U.S. households now own roughly $63 trillion of stocks and mutual funds, nearly double the amount at the end of 2022. Think about the feedback loop here. $GOOGL, $AMZN, $META, $MSFT and $ORCL spend trillions on AI infrastructure. That spending boosts construction, wages and demand for equipment. AI-related earnings expectations push stocks higher. Higher stocks increase household wealth. That wealth supports consumption. Meanwhile, hyperscalers keep borrowing and spending to build even more infrastructure. That is an incredibly powerful cycle. But it also creates a risk that I think the market may be underestimating. The more the U.S. economy depends on one massive investment cycle, the more painful it becomes if that cycle ever slows. And a growing share of this buildout is being financed with debt. That is why I think this is much bigger than an AI bubble debate. The question is no longer just whether AI generates enough revenue to justify Nvidia chips or data-center leases. The question is what happens to the broader economy if the biggest infrastructure boom in U.S. history suddenly loses momentum. We are not watching another software cycle. We are watching the construction of a new layer of the U.S. economy. And increasingly, I think one of the biggest mistakes investors can make is treating AI as just another sector. AI is becoming the economy.

JUST IN: A prime 270k sq ft office building in Downtown Seattle sold for $12.5 million - a shocking $46 per sq ft The price represents an ~87% decline from it's $97M value in 2019 Absolute destruction happening in Seattle right now... But this isn’t just Seattle - a massive office/CRE repricing is still happening across the country Stay tuned and follow for more major real estate deals and updates like this

The Art Deco posting shall continue until morale improves

Scary

In one of the most predictable developments in world history, to quote the New York Times: 'The University of Cambridge has abandoned plans to fully investigate its hiring of Jason Arday. Instead...the inquiry will examine whether the school offered him sufficient support amid accusations that he plagiarised portions of his thesis and embellished his personal narrative.' Arday 'will not be a focus' of the university's analysis of its hiring practices.' Everyone with more than two braincells knew they'd do this. These institutions are incapable of self-reflection. They are so profoundly in the grip of progressive groupthink that any story, no matter how egregious, that runs counter to it gets either ignored, shut down, covered over, or reframed as somehow proving that we need more of that precise groupthink. Absolutely embarrassing. I'm running a project to try and push back against this stuff. Follow on here for updates.

The decline of Britain in a tweet. Pencil pushing civil servant cries because **checks notes** the SAS aren’t kind cuddly blokes. The absolute state of it. (1/4)

A Muslim man in a balaclava holding & throwing a brick during 2024 riots… SUSPENDED SENTENCE A white man, threw a plastic bottle & swore at police during a recent protest… TWO YEARS IN PRISON Two Tier Britain 🇬🇧

Torsten says he wants to support the business chopping 500 jobs in his constituency, but his govt have sharply increased taxes and regulations on jobs. So surprise! Companies reduce employment. Labour’s growth plans in action!

"The fastest rate of decline since the CBI’s Distributive Trades Survey records began in 1983." Oh. But, hey, we have 'hope in every heart'. retailgazette.co.uk/blog/202…

Who gets hit next?

Fascinating business model

NEW LONG FORM VIDEO: Why nobody eats Crumbl Cookies anymore Crumbl Cookies went from a single store in Utah to more than 1,000 locations in less than seven years, becoming one of the fastest-growing restaurant chains in America. At its peak, the average store was generating more than $1.8 million a year. But by 2026, the story had changed dramatically. More than 20 locations closed in a single week, and some franchisees who had put their homes and savings on the line were facing serious financial losses. Just a year ago, Crumbl seemed unstoppable. After all, selling cookies to Americans sounds like a business that should be almost impossible to mess up. So how did one of the fastest-growing food chains in the country suddenly start falling apart? This is the rise and fall of Crumbl Cookies.

The elite won’t suffer but everyone else will- that’s 100% guaranteed. Worth a very short read.

America lost one in six of its neighborhood bars in a single decade, and the killer was real estate math. A bar like this can pour $3 beers because the building was paid off decades ago. The owner often lives upstairs. No rent, no investors, no debt service on a Pabst sign that's been hanging there for 40 years. The moment that building sells, the math dies with it. A new operator inherits a market-rate lease, which forces $9 drinks, which forces a renovation to justify $9 drinks, which produces another exposed-brick cocktail bar where the dive used to be. The Midwest kept its dive bars because of how they got built in the first place. Before Prohibition, Milwaukee's breweries put up corner taverns themselves. Pabst and Schlitz wanted guaranteed outlets for their beer, so they built bars directly into residential blocks. That's why these places sit on quiet snowy corners between houses instead of on commercial strips where rent explodes. Chicago had around 3,300 tavern licenses in 1990. It's down to about 1,200. At the worst of the decline, America was losing six neighborhood bars a day. And every single closure is permanent. You can't build a dive bar. You can only inherit one.

Does technology reduce the cost of operating a restaurant? Not necessarily. And that's a problem. 28.3% of restaurant operators said technology had "no significant impact" on their operating costs, per @WeRRestaurants. 28.8% said it reduced G&A 27.8% said it reduced food waste 22% said it reduced labor costs 20.4% said it reduced upfront costs 12% said it increased costs overall 7.9% were not sure. So 40%+ of operators say it either had no impact or actually increased costs. A big issue with technology is whether it has actually made the industry more efficient and that hasn't happened as much as you'd think, given just how much technology there is in the industry right now. So technology needs to bring customers in the door. But that isn't entirely evident, either, given the current state of restaurant sales and traffic.

📽️ What happens when the world's biggest exporter of one of the most important substances for modern civilisation decides to stop exporting it? We might be about to find out. 🛢️Primer on US diesel and the coming fuel crunch, inc why it could be especially grisly for Britain👇

Economic freedom is the only surefire way that humans have discovered to create wealth. stevestewartwilliams.com/p/a…

🦔Oracle sent a force majeure notice on Project Jupiter, its AI data center in New Mexico built for the $400 billion Stargate deal with OpenAI. The campus needs a 17-mile gas pipeline to power its Bloom Energy fuel cells. New Mexico denied the pipeline permits twice. Oracle wants the right to delay payments if the site misses its 2028 opening. $18 billion in project loans are at 89 to 91 cents on the dollar. ORCL fell 5%. My Take Force majeure is for earthquakes and wars. Oracle filed one over a gas permit they got denied twice. A company with $167 billion in debt and a junk-adjacent credit rating just told its development partner it might not pay on time. I think Oracle's balance sheet is worse than the market has priced in, and this notice is the first public admission. Twenty banks lent $18 billion for this project and they can't move the debt. Santander and Jefferies are stuck with more than they planned to hold. That loan assumed Oracle's backlog converts to revenue on schedule, but half the backlog is OpenAI, a company that burns cash faster than it earns it. SemiAnalysis has first power at this site in 2029. The banks underwrote 2028. I think the AI infrastructure bet cracks here first, in the loan market, before it ever shows up in stock prices, and the banks who funded the construction are the ones left with the bill. Hedgie🤗

The Elf and Safety bureaucrats making life boring because they can.