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Meta Builds a Cloud Business to Rent Out Its Spare AI Compute, Chasing SpaceX Into Infrastructure · Minds, Bodies, and Terawatts

• 0:00
  [Host] This is Minds, Bodies, and Terawatts, where the biggest spenders in tech just became landlords. Reuters reported on July first that Meta is building a cloud business to sell its spare AI computing power, going straight at Amazon, Microsoft, and Google.
• 0:16
  [Guest] And Wall Street loved it. Meta jumped about nine percent in a single day, its best session in months, on a stock that had been underwater all year.
• 0:27
  [Host] So the company that spent a fortune hoarding chips now wants to rent them out. What changed?
• 0:33
  [Guest] Math. Meta guided a hundred fifteen to a hundred thirty-five billion dollars in capital spending this year, nearly double last year's. Chips that sit idle between training runs are the most expensive paperweights ever made.
• 0:47
  [Host] So they turn the idle time into a bill somebody else pays.
• 0:52
  [Guest] That's the model. The unit's reportedly called Meta Compute, run by infrastructure chief Santosh Janardhan, with Daniel Gross from their superintelligence lab in the mix.
• 1:01
  [Host] But this wasn't Meta's idea. Elon Musk did it first, didn't he?
• 1:06
  [Guest] xAI, now merged with SpaceX, leased out its Colossus site in Memphis. Anthropic, a direct rival, signed up for all of it, about one and a quarter billion dollars a month through 2029.
• 1:19
  [Host] Wait, Anthropic rents from Musk? That's not a startup getting a cheap deal. That's a giant locking up an entire warehouse.
• 1:27
  [Guest] Exactly. And Google did the same weeks later. The renters here aren't the little guys, they're the other titans, signing multiyear exclusives because they can't build fast enough.
• 1:38
  [Host] So much for spare capacity. Isn't compute still in short supply?
• 1:43
  [Guest] It is. Rental rates for the top chips have been climbing again, not falling. Meta isn't dumping a glut, it's monetizing a shortage.
• 1:52
  [Host] So who actually wins if this becomes the norm?
• 1:55
  [Guest] A Google spokesperson called their SpaceX deal quote bridge capacity, because demand for their Gemini product ran even higher than they expected. When the giants are scrambling like that, the price and the terms belong to whoever owns the building.
• 2:11
  [Host] That's the part that bugs me. Meta versus Amazon sounds like competition, but they're all in the same club.
• 2:18
  [Guest] According to Morgan Stanley, just four firms, Amazon, Microsoft, Google, and Meta, are on track to spend around six hundred billion dollars on data centers this year. Now those same four want to own the ground everyone else rents.
• 2:33
  [Host] So compute stops being a secret weapon and starts getting priced like electricity. Which sounds great until you remember the electric company is usually a monopoly.
• 2:44
  [Guest] That's the tension. Cheaper for whoever's renting, but the meter belongs to the landlord.
• 2:49
  [Host] Patrick Deglon has a name for the other road in Unscarcity, the Substrate, computing infrastructure that no single company owns. What Meta's building is the opposite, a toll road with four gatekeepers.
• 3:02
  [Guest] For more on who ends up owning the infrastructure layer of intelligence, head to unscarcity dot ai. The book is on Amazon, the audiobook is on Spotify. This has been Minds, Bodies, and Terawatts.