Item — HN Reader

> It’s unclear where American labs future capital will come from.

It’s unclear to you, perhaps? But they’ll raise funds and/or debt as needed in the US capital markets as they have been doing.

> They pretty much exhausted private options at that point

I don’t think this is true. The evidence is that they keep raising funding for build.

> it’s not clear how successful an ipo would be at the current time

It’s always unclear, but also IPO success doesn’t necessarily translate into long term business success.

1 comments

Obviously to me, I express things from my point of view.

Raising too much from debt is a bit dangerous if you plan to go public relatively soon and don’t have a good story for it (I don’t believe they have one). You can continue raising from VCs, but at some point the valuation and dilution starts to become a real issue, and will make your ipo even more difficult. Their options are pretty much limited to raising money from hyperscalers (with required compute spending, so more circular funding), which is what they are doing, but you cannot do that infinitely without having a good story to tell Microsoft/Google/Amazon investors. The market is more skeptical than it was a few months ago, I’m not convinced you can do that for years to come

I think as a counter point we continue to see investment and buildout. What do you mean the market is more skeptical? Of course the market doesn’t really have an opinion per se and aren’t all of these companies growing in valuation, revenues, and profits? At least the public ones.