Ben Xiang

I put AI to work in finance and ops. Writing about AI deployments, markets and the economics of AI.

[Ben Xiang @benxiang]

WSJ says Nvidia's board is preparing to oust Jensen.

NVDA hit about $159 after hours. It closed near $187 on Friday. That's roughly $660B gone in 3 days.

Dan Ives put the cost of losing him at $1T to $1.2T.

So more than half of a Jensen exit is already in the price.

[Ben Xiang @benxiang]

@FirstSquawk credit card rates move with the fed almost right away, usually within a billing cycle or two. so a december hike shows up on people's statements by january

[Ben Xiang @benxiang]

@a16z the hold up is who pays when an agent buys the wrong thing. your card company refunds you when a stranger uses your card, but if you handed the agent your card yourself, getting that money back is a lot harder

[Ben Xiang @benxiang]

@garrytan I think Ive calculated 1T-1.2T of downside risk in Jensen leaving given his involvement in the business and that he’s a known entity in Washington. That said, much of that seems to be priced in.

[Ben Xiang @benxiang]

At $160, Nvidia trades at about 10x next year's consensus EPS.

Run it backwards and the price assumes earnings grow about 2% a year after FY28. That's a mature-company multiple already.

My model: Jensen leaving costs $76 to $156 a share. An AI capex turn costs $190.

The CEO is the smaller risk.

[Ben Xiang @benxiang]

Where I land: the business is fine for 2 years, the stock gets a lower multiple, and the real cost shows up in the 2029 products nobody has bet on yet.

Apple after Jobs is the good version. Microsoft in the 2000s is the bad one.

Earnings are Nov 17.

[Ben Xiang @benxiang]

WSJ says Nvidia's board is preparing to oust Jensen.

NVDA hit about $159 after hours. It closed near $187 on Friday. That's roughly $660B gone in 3 days.

Dan Ives put the cost of losing him at $1T to $1.2T.

So more than half of a Jensen exit is already in the price.

[Ben Xiang @benxiang]

Where it does hurt: Washington and financing.

Jensen personally got the China chip rules eased. The scandal is already building support for new curbs.

Nvidia also backstopped up to $125B of a $500B AI credit program. A new CEO may not keep writing those checks.

[Ben Xiang @benxiang]

@TheStalwart the timing is rough. anthropic is set to price its IPO next week with nvidia as one of its big backers, and nvidia might not have a permanent CEO when it does $NVDA

[Ben Xiang @benxiang]

@WatcherGuru in after hours trading the stock is now about 33% below its october high. the scandal was already in the price, the founder actually leaving is the new part $NVDA

[Ben Xiang @benxiang]

@DeItaone an 8% drop on nvidia is over $300 billion gone after hours, more than most companies in the S&P 500 are worth in total $NVDA

[Ben Xiang @benxiang]

@WSJ boards usually name a temporary CEO at the same time they push someone out. whoever that turns out to be will decide how much of tonight's drop sticks $NVDA

[Ben Xiang @benxiang]

@business the first day pop matters less than what happens months later when early employees are finally allowed to sell. that's when you find out who really believes the price

[Ben Xiang @benxiang]

@YahooFinance @dee_bosa so a big chunk of that $26B comes right back to the same seven companies as chip and cloud bills. kind of like a landlord lending you the deposit

[Ben Xiang @benxiang]

@nikkei $CRWV closed up about 25% today, way more than the 15% move traders were betting on. that's what happens when a company says demand is 10 times what it can supply $NVDA

[Ben Xiang @benxiang]

a running B200 pays back in roughly 15 to 29 months on my model. the risk was never rent falling, it's chips sitting in a building waiting on power and earning nothing while they depreciate $NVDA $CRWV https://t.co/U7CkIYDBfJ

[a16z @a16z]

GPU rental rates aren't depreciating on schedule.

As of October 19, rental rates were above a six-year straight-line depreciation path from their first observed rent:
- A100s by 9%
- H100s by 54%

@mavolpi: "The demand is so high that even if the watt-to-dollar conversion is low, you're going to still use the asset"

[Ben Xiang @benxiang]

united went the other way today. its new contract of carriage lets it cancel any booking an AI agent made. big companies open up once an agent shows up with its own approved integration, not the customer's password $UAL https://t.co/lCqgWLqKcq

[a16z @a16z]

HUMAN Security saw AI agent web traffic grow 8x from August to October.

Consumer agents are exploding, and we're in the early innings of the B2A economy.

Businesses that treat agents as first-class customers have a shot at a wave of growth. Those that don't may find themselves under threat. For years, retailers and platforms built walls to keep bots out – now, they will have to fight for bots' business.

Full piece from a16z's Olivia Moore and Justine Moore: https://t.co/Y4aT9wibgb