Musk Loses OpenAI Case, Leopold’s 13F, Data Center Backlash | Diet TBPN

0:02John Coogan:Massive day today. Tons of big stories. Five big stories I want to go through. Obviously, the first one is that the US jury finds OpenAI CEO Sam Albin not liable to Elon Musk for straying from charitable mission because Musk waited too long to sue. Weird, like technicality, I guess, but good news for OpenAI. Judge confirms verdict and that Musk's lawsuit is dismissed. Yeah, apparently they deliberated for about 90 minutes. 90 minutes. And they didn't really make any type of statement other than the statute of limitations. And so Max Zeff over at Wired says, Jury unanimously rules that Musk's claims are dismissed on the timeliness issue.

0:44John Coogan:He filed the lawsuit too late. Court affirms it will uphold the jury's decision. It's over. Musk loses the lawsuit against OpenAI. And Mike Isaac, the Rat King, says, unanimous verdict in a mosque versus open AI is in after only 90 minutes of deliberation. So did they deliberate today? They showed up at nine and went from nine to 1030 and then delivered the verdict. Is that what we think happened? Because Friday's off in the jury, right? No Friday. Yeah. Jury showed up this morning. Okay. Talked. Talked for 90 minutes. But they got to think about it all weekend and Friday. Interesting. Of course.

1:14John Coogan:Rat King says, huge day. Wow. And what did Tyler post? He posted a video of Drake talking about something. What's going on over here? W's in the shot. Shot. W's in the shot. Is that the opening eye slack right now? I think that's when he is gambling in front of the audience. Oh, it is a funny way to pronounce chat, but I enjoy it. The big news that was going on all weekend, actually, there was a lot of anticipation for Leopold Aschenbrenner Situational Awareness Hedge Fund to drop the 13F. It was supposed to go out Friday night, 5 p.m. Everyone was saying, oh, if he's not releasing it. Well, people were expecting it throughout the entire day.

1:56Yeah.

1:57John Coogan:They were very excited. And then there was some speculation that he had been able to petition to not have to release it. That was one theory. That was one theory. The other theory is that he was just entirely in cash. Don't need to report it. Just wind it down. Said it was a good run. Yeah. It's over. Yeah. Yeah. He's like, I counted the ooms and there's none left to count. We're done. Pack it up. No, quite the opposite. Leopold Asherbrenner, the hedge fund's chief investment officer, is known for making extremely successful investments based on his core assumption that frontier AI will continue to improve at half an order of magnitude, 0.5 ohms per year, which translates into a thesis that AI will create unprecedented demand for compute and its associated bottlenecks.

2:40John, they're saying it is blindingly light. It is brighter today, isn't it?

2:45John Coogan:Yeah, I think we got some new lights. We're sort of, you know, tweaking things. I do like that the wide is less dark. There's been a number of times we've gone and watched videos, and we've been very dark in the front. So we're bringing some light around. We'll see. Maybe we overdid it. Maybe we'll dial it back. I need to brush my hair. My hair's a little scruffy today. I also need a haircut, but we'll get to that some other time. We'll get to that later in the show. John will be getting a haircut live on the program. Potentially. uh but before we go any further yeah i uh nick over the weekend oh yeah a little gift for our very own tyler let's open we go to open it on on the video on the video nick hold it in line he waited in line look at this waited in line hey what do we got for tyler a very long line just for you tyler because what is it oh i'm trying to open it a little anti-com Wow, it's a, what is, I don't know how to pronounce this.

3:44Am I reading upside down? It's a little, little watch. Let's go. Another watch for Tyler. It is not. I don't know if you thought it might be, it might have been something else, like the Swatch AP collaboration.

3:58John Coogan:But really like the whole, you know, everything in the Swatch portfolio is fantastic, including this. I don't know. Describe what's on there. What is on there? Yeah, Nick, what is it? It has a rotating bezel. He says it has a rotating bezel. Okay, but just to be clear, it's not the Royal Pop. Which was completely sold out and causing, like, stampedes all over the country, all over the world. I saw footage, I think, from an international country around people really mobbing it. You were mentioning that you thought it was maybe an oral loss for both companies because of the craziness. Yeah, I just...

4:37Your brand is now associated with chaos.

4:39John Coogan:Yeah, that's not good. Yeah. Right. And AP, although it's although it's exclusive, like you have to sort of wait in line. The waiting in line is like, here, have a have a Diet Coke and sit in this private room while I tell you that you will not be getting an allocation in the skeletonized AP. Come back soon. Royal Oak or whatever. Right. Come back soon. And it's a it's a it's a very high brow waiting in line. Yeah. And this was. Yeah. They had to come out over time and say, these are not going to be limited. We're selling them a lot. And so the people that waited in line just to sell on the secondary market, I think have done pretty well.

5:16Oh, really? At least in the short term. But I would expect that over time, prices will sort of retrace toward retail. I did see a funny graphic of somebody that was basically saying, comparing getting a job versus waiting in the line to get it. And you actually did quite a bit better if you just got a job on Monday and getting in the line. And then over time, you know, your earnings really ramp out.

5:41John Coogan:Let's go back to Leopold Aschenbrenner and his 13F, the infamous 13F. There's a lot of discussion around it on the timeline. Really, like we have not seen this level of attention on a hedge fund's filings in a very long time. It's because it's breaking out of FinTwit. It's breaking into Tech, Teapot and TechX and all of that. mostly because a lot of the discussion centers around the filing shows he's made some massive puts across the semiconductor sector,$2 billion on SMH, the Van X semiconductor ETF. And so it feels like maybe more of a pointed thesis, less broad, hey, semiconductors are going to do well, more I actually, me, Leopold in this case, understand where the real value is, what companies within the semiconductor industry are undervalued, which ones are actually going to be useful in the next iteration of the build out.

6:39John Coogan:And a lot of stuff has been priced very hotly. Some stuff is overheated. The NVIDIA trade for a while became like crushingly obvious. And then it grew so much that that was not one of his early positions. Now it is looking like he is going long NVIDIA, which is interesting in the backdrop of is NVIDIA a car? Do they still have a moat, well, there might still be something else going on there. You have to dig in through this and understand what's going on. But the filing is hard to interpret cleanly because a 13F is only a snapshot of holdings as of March 31st, 2026. These positions are stale. You might have rotated out of these.

7:17John Coogan:13Fs do disclose put and call options. They don't disclose the strike prices, expirations, premiums paid, hedge ratios, short position swaps, or whether the options are part of broader structures. So you have to be careful out there if you're trying to read the tea leaves too precisely. You know, you can only take away so much from these. So Fejau, I don't know how to pronounce that, says unfathomably bad takes around this morning and a good reminder of Y13F. Digging is mostly a waste of time. March 31st, we were in the heat of the Iran war. It makes sense to put on hedges at the time. Options exposure on 13F gets quoted notionally as if it were 100 delta, i.e.

8:05John Coogan:all 100 shares per contract. So when you see something like, oh, he owns a billion dollars of Intel, it's usually he owns the right to purchase a billion dollars of Intel. And he has actually deployed far less capital into that position, although it is sometimes an important sign of things to come. We have no way of knowing whether these were five delta convexity hedges. convexity hedges and represent represented a fraction of what people are saying were billions in puts or whether they were ITM puts in the money puts. Further outright shorts don't get reported either. Too much noise associated with the things that happened back in March that aren't relevant now.

8:39John Coogan:We have no idea about his turnover in assets and trade frequency. A lot happened in the months of April and May. His positioning could be completely different. Making investment decisions for 80 vol assets based on data from months ago sounds like a good way to burn money. So don't idolize people and develop your own thesis for why you own and sell things. That is a good takeaway. Anyway, the AI backlash is continuing in a bunch of different ways. And one interesting sort of twist on this is that a lot of the AI maxis, the AI bulls were sort of concerned, at least, that this would all be fossil fuel based build out because everything else was too slow.

9:17John Coogan:They might be fans of nuclear. They might be fans of solar. but it was seen as infeasible, seen as the timelines being far too long. So if Leopold is in fact taking a position in T1 Energy, that sort of leads me to think that there's a little bit of a shorter timeline to at least bringing some solar power to bear during the AI build-out, that it's not all just sort of a hope and a dream that there will be solar power on the grid in any near amount of time. A lot of the nuclear power companies are moving on the backs of the AI build out, but it's still 2032, you know, when we talk to these folks, even the optimistic ones.

9:59So there has been big pushback on AI data centers across the board.

10:03John Coogan:We've talked about this a bunch. And it's both a left and right wing issue now. Sagar and Jetty predicted this, I think, last year when he joined our show. and it's been interesting. Left-wing is worried about job displacement, theft of art, destruction of creativity. Right-wing sees them as surveillance centers. That's the latest term is that they're used to spy on people. So that's an anti-libertarian, anti-right-wing position. But there are a whole bunch of others, just this hollowed out coal town is voting right-wing and then data center comes to town and they see it as just making their town worse off and benefiting like the coastal elites and like the people have flagged too that both sides are using ai to create graphics to oppose data centers that's true yeah there's all these like deep ironies there's there was a whole piece on someone who's protesting data centers and using a lot of ai to research how she can push back gabe says data centers need to be rebranded to data ranch data ranch i like a data ranch that's a good one um ox we got ox powered oh interesting salty says that Leopold sold Blue Energy in the latest 13th.

11:11John Coogan:Trimmed. Or trimmed. So if that's the case, then there you go. The latest debate that I saw was over this huge data center in Utah that's being championed by Shark Tank's Mr. Wonderful, Kevin O 'Leary. Are you familiar with this whole thing? Yeah, someone dug into like the plan and the plan actually seems pretty reasonable. But Mr. Wonderful, he's sort of an over-the-top caricature of a businessman. Like he plays one on TV. He is a real businessman. but he also plays a businessman on TV. And so he's a bit of a soft target. Like he was recently seen sporting not one, but two expensive watches, not unlike Tyler Cosgrove over there.

11:48John Coogan:He went to the Oscars wearing a Cartier Crash skeleton and a Ruby Rolex or Daytona. And I believe he also had a, like a trading card around his neck. So very ostentatious, very over the top, a very soft target if you're looking for someone to target in like a, He's doing it for the money. It's pretty easy. And so if you want to paint data center construction as maybe not in the best interest of average Americans, Kevin Leary is going to do a lot of that. A lot of the heavy-living point. Mr. Wonderful in the context of developing large-scale infrastructure that people are afraid of sounds like a supervillain, too.

12:26John Coogan:Yes. And also, you can put this in contrast to Eric Schmidt or Tim Cook, where the previous generation, like the major hyperscalers, like the big tech companies, they've done a pretty good job building a lot of infrastructure, making really, really bold climate pledges saying we're going to be net zero by this year. Our data centers are really clean. They built a lot of data centers without really any disruption. There was no backlash to Google Cloud through 15 years or 10 years of building AWS. And so now... But neither of them were rocking dual iced out. So you're making the case for quiet luxury, the quiet luxury of a Tim Cooker and Eric Schmidt.

13:07Definitely.

13:07John Coogan:Yeah. I mean, in this case, it seems like... No, I think Mr. Wonderful is not the guy to be the face of. Potentially not. But apparently his actual data center plans are reasonable. It actually seems pretty by the book, according to current plans. It's in a remote area. It uses its own power and water. And it doesn't seem to disrupt any local communities. We can pull up this video from Quick Thoughts that has a little bit of a breakdown. Million views complaining about a giant data center in Utah. And I'm kind of confused by that because I would think that an uninhabited desert valley in Utah is the perfect place to build a giant data center.

13:46I've been following really closely what's happening in Box Elder County, Utah, where Canadian billionaire Kevin O 'Leary is trying to build the world's largest data center,

13:55John Coogan:a$100 billion project. This would be the largest data center in the world at over 40 ,000 acres. And at full capacity, the data center, which is called the Stratos Project, is set to use 9 gigawatts of electricity. Gigabytes. You saw that?

14:13John Coogan:Well, she said it correctly. Yeah, yeah, but the transcript said gigabytes, which is funny. AI fails again. We need another data center to fix that. Steve in the X chat says, TBPN Studio uses the equivalent of 23 atomic bombs of energy to produce niche technology content. What reason the project area is so large is because they are buying water rights of the current property owners. So the current property owners are using water for agricultural irrigation. The data center project buys that land, buys a huge amount of land. See, he makes this sound good, but then it's like, wait, are we going to have less food?

14:49John Coogan:That doesn't seem that good. The point is that he's not taking it from someone who is going to be paying water or some local community. It's like there's already water rights there that are staying in that valley. It's not drawing power from the grid. If we look at electricity consumption by state, we can see that Utah just doesn't use that much electricity compared to other states. There are plenty of states that use double or triple. Tennessee is about triple. Pennsylvania, four times. Texas is like 10 times, more than 10 times what Utah uses. So if, over the course of this project, they reach their goal and they double or triple Utah's electricity usage, so why is that bad?

15:33It's not incurring more cost to the people of Utah because they're building their own power plan.

15:39John Coogan:By Utah as a whole. Robert Davies, a physics professor from Utah State University, says that he actually thinks the project will require an additional 7 to 8 gigawatts of waste heat energy, meaning that the project in total will be 23 gigawatts of total thermal load energy, which is the equivalent of dropping 23 atom bombs in Utah every single day. Okay, electricity generation across every state is going to have that same thermal load property. Not every generator is perfectly efficient, so they're going to generate waste heat as well. So if you say, okay, we're going to have 23 atom bombs a day worth of electricity going off in Utah, well, then currently we have 230 atom bombs a day going off in Texas.

16:24You've got to put everything in the atom bomb comparison.

16:27John Coogan:Your car is the size of five atom bombs. So an atom bomb is maybe this big, maybe a little bit bigger. Yeah. Your car weighs as much as seven atom bombs. That's right. It makes it sound so much more weighty when you're just comparing everything to atom bombs. Night temperature by 28 degrees. This is actually pretty crazy. 28 degrees feels like a lot. Daytime temperature could increase 2 to 5 degrees throughout Hansel Valley. Not the state of Utah, the valley where the data center is being built. Same with nighttime temperature, could increase up to 28 degrees trapped in the valley. Hansel Valley is an uninhabited desert valley.

17:08So if you build a big power plant here and a big data center here, maybe it'll increase the temperature of this valley by 5 degrees. But okay, nobody lives there. I think this project solves a lot of people's stated concerns with data centers. You're worried about water usage. They're reallocating agricultural water to cool the data center. Worried about power cost. They're building their own power cost. That one line is not helping. Worried about waste team.

17:33John Coogan:But I like vegetables. In the middle of an uninhabited desert valley where it's already hot. And you're worried about this is such a huge project. This is a giant data center or something, world's biggest data center. Well, that's just data centers that don't have to be built in other places that are being built in this uninhabited desert valley. I think the concerns in her video are just fear-mongering for reasons that I hope I've explained here. Thanks for your time. I guess the question is, they say that there's water for agricultural usage right now in that valley, but the valley's uninhabited and seems like a desert, so it doesn't seem like they're growing food there.

18:09John Coogan:So, like, where is that water actually going? Because is it just getting piped to some other farm, like, far away? So way, way, way back in the day, way back in the day, you could just have a piece of land, you could drill a well, and you could pull up as much water as you wanted. And then people realized that if you have a property here, and there's property here, here, here, here, here, they're oftentimes all pulling from the same aquifer. So you, all of a sudden, if you come in, you move in next to me, and you start pumping billions of gallons. I drink your milkshake. Yeah, you're drinking my milkshake.

18:43I drink your milkshake. I drink it up. And so it's very possible that all these parcels of land, which they collectively bought, they all have their own water rights. That doesn't mean they're being used, right? Because people will sell their water rights to like a neighboring property that is.

19:04John Coogan:But my question is like, sounds like they sold the water rights previously, or they had some sort of deal to send the water that they were getting out of the desert, which I can't imagine produces that much water, but I guess it does, use it for like agricultural purposes. Like what were they growing? Well, agricultural could mean you have some, like you have some cattle, like there's a bunch of different potential meanings for that. It doesn't mean you're growing fresh produce. But were they actively using it or were they just like not? No, that's the other thing. I don't know. That's the other thing too.

19:35It could have been agricultural land, but not.

19:38John Coogan:Could have been like a failed farm. It's not farming anymore. Like a former livestock, like a farm, something like that. But I don't know. These points, like, as you said, I think are going to be hard to break through just because AI is so deeply unpopular for a variety of reasons. And we should watch the video of Eric Schmidt getting booed on stage at University of Arizona. He says, this is incredible. Artificial intelligence getting booed out of the stadium in any commencement speech it's mentioned in maybe telling college students ai was taking their jobs wasn't the best strategy let's watch this clip the architects of artificial intelligence