Anthropic's $35B cloud deal with Lambda adds new layer to circular financing concerns

Morning Brief Host Julie Hyman is joined by Yahoo Finance Breaking Business News Reporter Jake Conley and Senior Reporter Pras Subramanian to take a closer look at this network of AI deals -- Nvidia owns the lease on the data center site, which will be built by Hut 8 -- and weigh in on the circular nature of the AI landscape.

Today's deal is Anthropic signing a 35 billion cloud deal. It's backed by Nvidia, but it's with an Nvidia backed company called Lambda and Hut 8 is going to be the developer of this data center. So there's a lot of fingers in the pie for this one. Which

I had to I had to draw it out. I had to draw it out for today.

There you go. That's a good use of your phone.

I couldn't I couldn't I was like, how is this? It literally is a circle.

Okay, so what so what so I wish we had a graphic of that.

I don't know if I have this correctly, but you have Anthropic, right? Give me 35 billion to Lambda, right? for the compute, right? Lambda giving money to Hut 8 for the for the data center. You have Nvidio over here giving money to Hut 8 for investment, right? which they do. Hut 8 paying Hut 8 paying for the chips, right?

And holding the lease.

And also to

or leasing it. I don't know who knows how that how this part works. And then of course, Nvidia investing in Anthropic. The whole circle is complete, right?

Yes. And also invest like Nvidia's at the center because it's investing in all of these things and handing out money to all of these

It supplies the chips. It backs the provider. It holds the least.

But I had to draw it out because it just was again, we were the circular deals can be kind of confusing if you don't actually look it at it schematically.

Right. Um and then you're saying, why is there one company in the middle of everything?

Yeah. Right. Yeah.

Well, every few weeks, one of the big investment banks comes out with a new chart of all of Nvidia's deals it's made kind of mapping the whole picture. and the web just keeps getting more and more and more complex. We were meeting this morning, kind of going over what we were going to talk about today.

You made what I thought was a very smart point that with these deals, we're getting to a point of dog bites man.

Oh, yeah, yeah, yeah.

But my worry with the dog bites man approach is like, sure, it's a Tuesday, we have another billion dollar deal. Does it risk complacency that we're going to start missing things if we're not really paying as much attention as we were six months ago?

Um, I guess. I mean, missing what? What are we looking for?

Because the risk is growing, the leverage is growing, the circularity to process point of it all is growing. It's getting more and more and more tangled and I worry that we risk losing sight to your point. Who knows how any of this actually who can actually draw this out on a map of how this all looks?

So I look at it from like the auto point of view, because I always do that, right? So it's okay, so, if you're GM, right? You have a captive finance arm, okay? I'm going to finance my customer's cars. Great. That's not too bad.

But I think the the little wrinkle is if it's almost as if the customer, okay, so I'm I'm I'm financing the customer, he buys my product, and then there's some other third party that I'm also investing in that holds the debt, you know, like it just it seems like it's more more convoluted than just vendor financing, right?