kerman kohli
@kermankohli
founder @routemesh | researching & investing in ai/semis @siliconfrontr | a few rtx 6000 max-qs, too many dgx sparks and some b300s (soon)
Joined May 2010
1.1K Following 10.6K Followers
it’s super interesting how finance people want to so desperately map what they know to gpus but it just doesn’t hold.
it all makes rough sense but you forget that:
- making new airlines is very hard (gpus)
- flights are going to be in a massive shortage (compute)
- airlines are worth more over time or depreciate v slowly (hbm inside gpus)
- seats can be rehypothecated to fit multiple people per seat (monetizing interruptible compute on an existing lease)
as you can see it’s loose at best but you need a new set of eyes to view all of this stuff.
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A lot of ink has been spilled on GPU financing lately. I spent over a decade trading ABS on Wall St, and structured over $2B+ of debt financings as an operator (including at @tryramp). Figured I'd try to make sense of this market, so I went back to a framework I knew well: aircraft ABS and aircraft engine ABS.
My take: a GPU neocloud runs on airline economics, and the debt behind it looks a lot like aircraft engine ABS.
The parallels:
• Perishable inventory. An empty seat after the door closes is gone forever. So is an idle hour on an energized H100 rack.
• 85%+ of cost is fixed (servers, 10-year rack leases, 10-14% debt service). One more hour of compute costs pennies of power.
• Utilization is everything. Airlines break even around 80% load factor, a levered GPU cluster around 65-75%. The returns live in those last 25 percentage points.
• NVIDIA is Boeing and Airbus rolled into one. Powered shells and grid interconnects are the new airport slots.
• Wall St copied the aircraft financing playbook: take-or-pay contract plus servers in a bankruptcy-remote SPV, 70-80% LTV.
Part 1 of my blog post goes into a lot more detail:
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