Joe Vafi

Joe Vafi asked for more insight into Bitcoin's recent price action, specifically regarding OG profit-taking, potential over-leverage in the system, Bitcoin's identity as a risk asset versus a store of value, and where selling was most prevalent.

Answer

CEO Mike Novogratz attributed the price action to significant OG profit-taking, describing it as a 'virus' of selling. He mentioned quantum concerns as an excuse, but believes Bitcoin's code will adapt. He cited one customer selling $9 billion, impacting the market, and suggested the market is in a distribution phase with little leverage left, awaiting a new catalyst.

Joe Vafi asked for further color on Bitcoin's recent price action, specifically regarding OG profit-taking, system over-leverage, Bitcoin's role as a risk asset versus a store of value, and the sources of selling pressure.

Answer

CEO Mike Novogratz attributed the price action to significant OG profit-taking, describing it as a 'virus' of selling. He dismissed quantum concerns as an excuse, believing Bitcoin's code will adapt. Novogratz highlighted a single customer selling $9 billion, which takes time to absorb, and noted that there is not much leverage left in the system, suggesting the market awaits a new catalyst.

Joe Vafi asked for more details on Itaipu and Paraguay's strategic importance to HIVE, inquiring about the additional power available from Itaipu, the Paraguayan president's views on AI, and whether HIVE has engaged in discussions with Brazilians regarding Itaipu power or explored other regional opportunities.

Answer

Aydin Kilic, CEO and President of HIVE, highlighted that Paraguayan leaders are internationally educated and keen to position their country for success in the data center industry, actively discussing the future of data centers and HPC in Latin America. He mentioned the Itaipu Dam's vast capacity (14-15 gigawatts) and the expectation that power pricing from the dam will become directionally favorable as its construction costs have been paid off. He indicated that HIVE is working on initiatives to improve the grid and contribute to national infrastructure, and to stay tuned for updates on regional activities.

Joe Vafi asked for more details on Itaipu and Paraguay's strategic importance for HIVE, including additional power availability and the President's views on AI. He also inquired about discussions with Brazilian entities regarding Itaipu power, given the dam's shared ownership.

Answer

Aydin Kilic, CEO and President of HIVE, highlighted the Paraguayan government's international education and desire to position the country for data center success, working closely with President Santiago Peña. He noted the Itaipu Dam's 14 GW capacity and anticipated favorable power pricing post-2027 as construction costs are paid off, hinting at ongoing initiatives to improve the grid and contribute to national infrastructure.

Joe Vafi, a Managing Director of Equity Research at Canaccord Genuity, asked Daniel Roberts to elaborate on IREN's risk assessment for the Microsoft AI cloud deal compared to a traditional colocation deal, considering the high IRRs. He also inquired about the significance of Microsoft's upfront prepayment for GPU purchases and how that agreement was reached.

Answer

Co-Founder and Co-CEO Daniel Roberts articulated that IREN views the AI cloud deal with Microsoft as having a superior risk profile compared to colocation, citing challenges in equity return and GPU refresh risk in colocation. He emphasized the optionality and downside protection of the cloud model. Daniel Roberts also expressed appreciation for Microsoft's 20% prepayment, which funds a third of the CapEx and significantly contributes to the projected 35%+ equity IRRs, underscoring the transaction's efficiency and strong risk-adjusted returns.

Joe Vafi asked Daniel Roberts to elaborate on his perspective regarding the risk profile of the Microsoft AI Cloud deal versus a straight colocation deal, acknowledging the higher returns of the cloud deal. He also asked for more details on how IREN secured the significant prepayment from Microsoft for GPU purchases.

Answer

Daniel Roberts (Co-Founder and Co-CEO, IREN) articulated that he views the cloud deal as having a better risk proposition than colocation, especially given the hyperscale credit. He argued that colocation deals often rely on recontracting for equity returns and carry significant GPU refresh risk with smaller counterparties. He emphasized the cloud deal's 35%+ equity ARRs, the internal data center charge, future-proofed data centers, and the optionality post-contract. Regarding the prepayment, he expressed appreciation for Microsoft's contribution of one-third of the CapEx upfront, which significantly boosts equity ARRs and efficient funding.

Speaking on behalf of Joe Vafi, Will Johnson asked how conversations with customers have changed sequentially given recent tariffs and market dynamics, and whether the pace of discussions differs between hyperscalers and enterprises.

Answer

CEO Adam Sullivan noted that tariffs are expected to increase CapEx costs by 5-10%, which will likely drive up lease rates across the industry. He observed that the pace of discussions with large enterprises has quickened as they have firmed up their growth plans, making it a significant growth channel for high-density colocation.

An analyst on behalf of Joe Vafi from Canaccord requested an update on the adoption of the 'Rapid Refi' product and asked how the company is thinking about the size of its sales team as a potential area for investment.

Answer

Nima Ghamsari, Co-Founder and Head of Blend, reported that the 'Rapid Refi' product is in a pilot phase with 2-3 mortgage servicers, and the company is focused on gathering ROI data before a broader launch. He also noted that Blend is carefully considering investing in its sales team to better target the mid-market (financial institutions ranked 100-1,000), where they see significant opportunity but may currently lack sales capacity.