Jay Cuthrell examines tensions in AI infrastructure: the Stargate narrative may not match reality, Tesla caps employee AI spending at $200 weekly, and companies are shifting toward digital-only systems. Rising DRAM prices and cost controls suggest AI abundance is ending.
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Welcome to What the Fudge for July 5th, 2026, the July 4th holiday weekend edition. We're up to number 17 in the series, and I've done pretty well at keeping it under 5 minutes. I'm going to try again this week, taking a look at the following topics: hyperscale infrastructure, token rationing, and that's, uh, probably a segue to what's going on in the physical world of scarcity. So let's just get started. If you remember back in the early coverage of large AI infrastructure initiatives, the story around Stargate, and, uh, Stargate was many, many things in many, many locations, but in one instance it would be a data center in the UK. And the news this week is that there are stories around the Cobalt data center that may not be lining up, uh, with the reality or the PR that was placed in that Stargate storyline. I think that it is easy to say there just might not have been the actual commitment, meaning has a shovel hit the dirt and moved anything. So the other element of that that's interesting, if you remember some of the early departures from OpenAI and the drama surrounding OpenAI, there is now a sort of story that was captured 2 years ago, but supposedly is coming to light. So there was a guy, Leopold Aschenbrenner, who was interviewed in a podcast a couple years ago, and it was around situational awareness. And, uh, you know, I think he's started a fund, so he's going to be in the finance side of this, uh, race, uh, to AI dominance across countries and companies. But long story short is even some of the things that were predicted in that podcast 2 years ago are kind of coming together now. I think predictions are interesting whether or not they all play out, but it is fascinating to go back and listen to that podcast from literally 2 years ago. So I'll put the links into the show notes. The other part of this is that NVIDIA is becoming more of a player on the— obviously the creation of the infrastructure, the physical chips that go into the infrastructure, but now they're also providing almost like a financial institutional arm around this. So very fascinating to see that as you go from the traditional capital-intensive markets to now what might become more operational or finance sides of, of that play to give a full capability of what your customers might need, especially when there's a, a rise or a fall or some need to stay afloat while also you know, having access to the things that keep your company afloat. Now, if you then pull back a little bit further, you get into the news stories around unbridled, you know, or exuberant approaches to bringing AI into companies. And someone finally got the AI bill, just like if you remember the old cliché, someone finally got the cloud bill when the cloud was new. So you've got stories around Tesla and other companies that are starting to put into place so-called internal, you know, AI utilization policies around AI spend. And so the Tesla story, I think, was $200 a week limit on staff. Now the question will really be is how does that tie into other elements when you look at technology business management, true disciplines around like not just FinOps but labor, labor COGS, COGS attached and the labor attached to those COGS, as well as, you know, things like SaaS. So if you play this all out, if you look at like what's happening with Microsoft, so-called Autopilot Premium, If you look at what's happening with the cost of DRAM prices and the supply chains to supply everything that goes into the apps being created, there's, there's clearly going to be some kind of slack in the system, some scarcity in the system, and that's just playing out. And that sort of also ties into the last topic I'll cover for today, and we'll keep it under 5 minutes, is, you know, Sony's gonna stop shipping media. There's people that have always predicted the end of physical media, but in this case it's about really going to a fully digital download perspective. We also heard some stories in the news around potentially with SpaceX getting all of their infrastructure into orbit, there might be some handsets that come to market. And then the last element of that was of course, whether or not there would be Facebook offering cloud computing much like all the other companies. So if you remember the original large cloud providers, there was like, oh no, that's a private cloud, it's only used by Facebook. Well, you know, what if there was a way for Facebook to monetize that infrastructure? So, getting close to the 5-minute mark. I told you I'd stay under 5 minutes. So thank you for listening to What the Fudge, the 17th edition in the series. Take care now. Bye-bye.
