Daily Alpha · Substack
· Premarket Alpha · by Buzzberg Research
AI-financing circularity dominated the substantive newsletter thesis, with a separate grid-planning warning pointing to regulated-capital risk.
Themes on this desk
AI financing loop
QTR argued that infrastructure financing, compute purchases and semiconductor revenue reinforce one another until end demand or credit breaks the loop.
Grid-model risk
SemiAnalysis alleged that a PJM modeling error wasted ratepayer capital and could be repeated.
AI infrastructure financing described as a circular bubble
The author argues that AI infrastructure spending is a reflexive, circular financing loop where high valuations fund compute purchases, which generate revenue for semiconductor firms, which in turn supports higher valuations. This cycle is vulnerable to a deleveraging event if end-user demand fails to materialize.
A potential violent deleveraging could spread from AI-linked public equities to private credit, real estate, and crypto if financing conditions tighten.
Watch Watch for hyperscaler capex guidance cuts, AI laboratory revenue misses, or credit events in private AI-infrastructure financing vehicles.
Source →PJM Interconnection criticized for modeling errors
SemiAnalysis reports that $12 billion in U.S. ratepayer funds were wasted due to a modeling mistake by PJM, and alleges that the organization intends to repeat similar errors.
Potential for continued capital misallocation and regulatory scrutiny regarding grid infrastructure planning and utility costs.
Watch Future PJM planning reports and any regulatory or legislative responses to the alleged modeling failures.
Source →