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Wednesday, October 7, 2026

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@convequity 2 clicks

Convequity on X

More $NVDA chips could end up going to SpaceX and other buyers that can borrow at investment-grade rates, leaving neoclouds with fewer chips than they need. SpaceX's planned $40bn chip borrowing shows why. The deal: $SPCX is in early talks for about $10bn of bank loans and $30bn of investment-grade debt, led by Apollo, with Pimco also in talks. It would close in 2027, and the talks could still fall apart. The comparison: in December, Apollo lent about $3.5bn to fund xAI's Colossus 2 chips through a separate company set up just for that deal. The interest rate was about 10% a year. xAI is now part of SpaceX. Investment-grade debt usually costs much less. US investment-grade corporate bonds yield around 6% on average today. The rate on the new $30bn has not been reported, so we don't know the exact saving yet. Why it could be cheaper: lenders would be relying on SpaceX's launch and Starlink businesses to repay, not only on the chips. That is the real financial payoff of putting xAI inside SpaceX. Most GPU buyers can't borrow like that. $CRWV is rated junk (Moody's Ba3, Fitch BB-) and pays 9.25% on its 2030 bonds. Standalone AI labs have no public credit ratings that we could find. Not every neocloud pays up. $NBIS has a GPU loan at a floating benchmark rate plus 2.5%, against CoreWeave's plus 5.5%. Our view: the debate on X is whether this proves AI demand or shows too much leverage. We think the bigger point is cost of capital. When chips are scarce, the buyer that borrows most cheaply can pay for the most of them, and neoclouds paying junk-level rates get squeezed out.
@convequity

Convequity on X

We agree with Ampersand: an agent is vaporware without deep access to the customer's systems of record. But the result is headless SaaS, where the agent becomes the interface, and headless SaaS does not keep today's economics. Convequity's SaaS Survival Scorecard splits a vendor into three layers, the interface, the workflow and the data, and scores how many of the three it keeps once agents arrive. 1. Deep integration into the system of record is the headless path: the user works through Claude, ChatGPT or another third-party agent, and the vendor keeps workflow and data underneath. Our scorecard calls this Route 2: roughly half the SaaS value is replaced, and the vendor is survivable but diminished unless outcome pricing rescues it. It is the most likely near-term route, and a starting point rather than a stable endpoint. 2. Model companies will expand into the workflow layer to keep growing, and a vendor whose workflows mainly connect other SaaS APIs is highly absorbable. A vendor left with only its data layer is plumbing: it still earns on agent traffic, but it gives up a lot of the value. A vendor that keeps hard-to-replace workflows retains more of it. 3. More agents does not mean more SaaS revenue in every domain. Back-office cost centers like HR, accounting and IT service management have a natural ceiling, because making the work cheaper does not create more of it. Agents cannot create demand for an extra tax filing. Revenue-generating functions like sales and marketing can grow with agents, because extra work there produces extra revenue. 4. Keeping all three layers is rare. $PLTR is the full Route 3 case in our scoring so far, because its ontology works as a quasi system of record and it has model-layer leverage. $PANW approaches Route 3 only within security operations, where sensors and inline enforcement are hard for an agent to absorb. Nearly every other vendor will give up the interface. Ampersand's integration layer and our scorecard describe the same future: the agent is the interface, and the vendor keeps workflow and data. We differ on the economics: a vendor keeps more revenue where the work is unbounded and it holds its workflows, and less where the work is bounded or it is left with only its data.

Investor Letters

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Research Roundup Vol. LV

OpenAI’s enterprise privacy push and Synopsys’s Factory 2 royalty model anchor a technology roundup, alongside oil above $100 and Bitcoin’s…

SNPS $97B
Monte Independent Investment Research

New Position (ONON): Game is On

On Holding (ONON) is gaining sportswear share, expanding store space and launching soccer with Kylian Mbappé as investors debate U.S.

ONON $11B
Aurelion Research 3 clicks

When the Ads Come to the Data

Meta’s Muse could place ads inside its AI agent by letting a private VM select offers from advertisers without sharing user data with…

META $1.8T
MBI Deep Dives 5 clicks

Deep Dive: Intuit ($INTU)

Intuit’s $21.4 billion software franchise faces AI-driven pricing pressure in tax and accounting, even as QuickBooks and TurboTax retain…

INTU $79B
Rebound Capital 4 clicks

Deep Dive: Amazon (Updated)

Amazon’s AWS grew 28%, with a $364 billion backlog, supporting the case that up to $200 billion of annual AI capex can earn solid returns.

AMZN $2.7T
Rebound Capital

MercadoLibre: Valuation Model

MercadoLibre’s sum-of-the-parts model values commerce and payments on FCFF, credit on equity returns, producing a $1,980 base-case target…

MELI $94B
Hated Moats

Meta On the Offense!

Meta’s Muse Spark 1.1 targets agentic enterprise work, backed by employee workflow data and 3,000 engineers building reinforcement-learning…

META $1.8T
MBI Deep Dives 1 click

U-Haul Bought at the Top

U-Haul’s pandemic-era fleet purchases at inflated prices now drive higher depreciation and disposal losses as truck and van prices…

UHAL $11B
scuttleblurb 2 clicks

PDD Supplemental

JD, Alibaba and Douyin are assessed for their competitive threat to PDD, with a specific investment stance on JD.

PDD $115BJD $36B
Bearstone

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