Ep 135: Life Tends To Not Go The Way The Majority Think. Amazing Is Different To $ Value Creating.

Don, Aaron and Jack unpack a big week in venture, AI and building companies.

• NextDC drops 40% in a day and 65% from its peak, wiping out a decade of price appreciation: the Melbourne site could not get power or community sign off, and the bond market saw it first, with the 2030 subordinated margin going from 2.75% over the bank rate to more than 6% in a couple of days.
• Data centres and debt: Firmus was going to list at $44 billion, these valuations assume future debt at yields that no longer exist, and the open question is what happens to the infrastructure play if cooling in space turns out to be the better answer.
• Open weights are eating the frontier: on OpenRouter the open weight share has gone from 25% to 71% since 1 June, and Don's case to Canberra is that a billion into local open capability beats trying to pick a winner in quantum.
• The circular flow of cancellations: everyone is cancelling software and rebuilding internally while their own customers cancel and rebuild, which is what having no technical moat actually looks like.
• Frontier labs will pay $100,000 to $2 million for your Slack, email and CRM: they want to learn how the work actually gets done so their AI can build the software that runs it.
• Satya Nadella and Bill Gurley on business apps collapsing in the agent era: biz apps are CRUD databases plus business logic, the logic moves to the AI tier, and then the back ends get replaced.
• Sophii AI and the build it yourself trap: tradies who built their own tooling are spending more on compute and subscriptions than the product would have cost them, before counting the time to maintain it.
• Cut Through Ventures has dollars invested at an all time peak, but 70% to 80% of it went into three deals, so the bottom of the market is dry. Jack's take: once the back end and compliance work is automated, the only thing left is judgment.
• Sharts: LLM token costs doubled to May then fell 50%, Victoria spending more on interest than schools by 2030, US personal bankruptcies up 30% in a couple of years, put option volume up more than 10x since 2024, US power from 14 to 19 cents per kilowatt hour, the MAGA hat from $22 to $55, and the last Freemason in Victoria due 8 August 2037.

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