Karan Shah

Proud Husband and Papa - always.
Founder & CEO @ mine. - sometimes.
turning debt issuer memory into intelligence.
born&raised 🇰🇪 | adopted 🇬🇧 | posing 🇫🇷

[Gavin Baker @GavinSBaker]

Regret the tone of my post on data centers yesterday.

What I should have said:

There were reasonable concerns about data centers 18ish months ago: water, taxes, jobs, electricity prices, the environment and what they would do to small towns. Well-structured data center projects have largely addressed these concerns today and we should be celebrating this.

On balance, data centers are awesome for America in every way.

On water: U.S. data centers use a fraction of what golf courses use. A lot of the numbers from 18 months ago were off by over 1000x. Newer data centers use closed-loop systems or recycled water. Should be required by every town approving a data center project.

On taxes: looking only at sales-tax exemptions, as Ronan Farrow did, is the wrong way to evaluate this. Data centers pay significant property taxes. Loudoun County, which is the wealthiest county in America, now collects on the order of $1 billion a year from data centers. In Quincy, WA, data centers are more than half the property-tax roll. Over time, property taxes can go to zero while government spending increases in these towns.

On jobs: this has been unambiguously awesome for blue collar Americans. Demand for electricians, plumbers, welders, HVAC techs, and contractors has gone vertical, and it is not a one-time construction job. These buildings get upgraded and expanded over time. That is why the building trades are fighting for them, and why some unions are now treating opposition to data centers as a reason not to endorse politicians.

On power: the original fear was that households would pay for the incremental electricity demand in the form of higher prices. That is why the ratepayer-protection deals and the new large-load tariffs exist. The right structure is: the data center brings or pays for new generation and signs a contract long enough that existing customers are protected. Where that is happening, utilities are cutting or freezing residential rates and saying so on the record. Where it is not, people are right to object. Electricity prices are going down *today* in a number of large states because of data centers.

On the environment: data centers overwhelming use natural gas today, which is the cleanest power source outside of nuclear, solar and wind. And the companies that are building the data centers are committed to carbon neutrality such that an equivalent amount of solar will likely be built. Maybe more importantly, the data centers need batteries to function effectively and these batteries can also sell energy back into the grid (which recently prevented blackouts in Texas). Over time, data centers will run on solar plus batteries.

On the towns: Poverty in Quincy, WA fell from 29% to 6%. Data center taxes paid for a new high school, a hospital, a library, police and fire stations. This is happening in many left for dead former mill and farm towns that had no other bidder for the land.

Data centers are actually reindustrializing parts of America and creating the kind of working-class jobs both parties have spent decades claiming to support. That should not be a partisan issue. Data centers can and should be awesome for America and they increasingly, overwhelmingly are. Supporting the outsourcing of data centers to China will likely age just as well as support for the outsourcing of high quality, blue collar manufacturing jobs to China has aged.

When the facts change, I change my mind. I hope that reasonable people who had good faith reasons to oppose data centers at least consider updating their beliefs given the change in the facts over the last 18 months. This really matters for America.

I will say I also think the idea of making data centers beautiful is a good one that has yet to be implemented. Data centers should be just as beautiful as Grand Central Station. We can learn a lot from the railroad buildout. Neoclassical revival ftw.

Might write up open-weight AI tomorrow as this is equally essential to America.

[amit @amitisinvesting]

LEGENDARY INVESTOR STANLEY DRUCKENMILLER JUST WROTE AN OP-ED FOR THE WSJ ABOUT BOND YIELDS.

He is not happy with what the Treasury is doing, thinks that it’s effectively a gimmick, and wants the Bond Market to freely determine where yields should go.

His op-ed summarized below:

- The Treasury’s decision to double long-dated bond buybacks from $2B to at least $4B per operation looks less like liquidity management and more like an effort to push down long-term yields after the 30-year yield reached a 19-year high.

- There was no clear market dysfunction forcing intervention. Auctions were functioning, volatility was contained, and trading remained orderly. With inflation still above target, unemployment near full employment, deficits around 6% of GDP, and debt above $40T, higher yields can be viewed as the market pricing fiscal risk appropriately.

- Suppressing those yields risks weakening one of the few remaining forms of fiscal discipline on Washington. Lower borrowing costs reduce the pressure to deal with deficits, entitlement spending, and the broader debt trajectory.

- Buying long-duration Treasuries while funding the purchases with short-term bills effectively removes duration risk from the market, making it resemble a small form of quantitative easing conducted by Treasury rather than the Fed. The concern is that once markets believe officials are defending a certain yield level, they may keep testing that commitment.

- The better solution is to let the bond market set the price of government borrowing and address the underlying fiscal problem directly: reduce the primary deficit, reform entitlements gradually, and manage debt more responsibly. Liquidity tools can delay a fiscal problem, but they can’t solve it.

These yields are becoming an issue.

When someone like Drucks has to write an op-ed, you know he’s getting annoyed. Either we cut back on spending and get fiscal policy in order (no party will do that) or we end the Iran war to get yields down. If we don’t do either, this problem isn’t going away.

[Karan Shah @karanjaaaaaa]

@jjen_abel @lennysan Jen I can't tell you how valuable this was for me (first time Founder selling into enterprise) - incredible insights!!

[Karan Shah @karanjaaaaaa]

Because starting a company isn't enough exposure to public failure, so I've decided to start posting on X too.

No particular agenda.

~20 followers, mostly bots. ~$20k ARR.

Feels like a suitably low-risk environment to start sharing some thoughts.

[Karan Shah @karanjaaaaaa]

@Jason I’m in

[Karan Shah @karanjaaaaaa]

@JJEnglert GTM guide

[Karan Shah @karanjaaaaaa]

@CatchMeStacking @MoTheComedian @KaranSomaia 😂