Tech Brew Ride Home - The Pivot To AI Datacenters

Episode Date: December 16, 2025

Tech continues to be a major geopolitical stumbling block, this time with the UK. Are we currently in the midst of the second mini-tech recession of the year? If Ford can pivot from EV’s to servicing datacenters, maybe you can too. And the civil war lining up in Hollywood, over AI. U.S.-U.K. Trade Deal Hits Stumbling Block (NYTimes) AI infrastructure selloff continues on Wall Street as Broadcom, Oracle shares slide (CNBC) CoreWeave’s Staggering Fall From Market Grace Highlights AI Bubble Fears (WSJ) Ford is starting a battery storage business to power data centers and the grid (TechCrunch) AI has the entertainment industry torn between keeping up and keeping talent happy. (BloombergBusinessweek) Learn more about your ad choices. Visit megaphone.fm/adchoices

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GoogleFi Wireless is not subject to data traffic deprioritization during times of high network usage. Welcome to the Czechbu ride home for Tuesday, December 16th, 2025. I'm Brian McCullough today. Tech continues to be a major geopolitical stumbling block this time with the UK. Are we currently in the midst of the second bear market for tech of the year? If Ford can pivot from EVs to servicing data centers, maybe you can too, and the Civil War lining up in Hollywood over AI. Here's what you miss today in the world of tech. You might have noticed that your CRM system has, become crazy with bots and agents. At the TechBrew Ride Home, we love AI, but not when it's used to commit fraud or launch ransomware. Fortunately, Momoto, the creator of continuous verification, now offers the next generation

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Sources say the U.S. has paused a tech trade deal with the U.K. signed in September over disagreements about the UK's online safety rules and digital services taxes. Quoting the Times, the United States informed the British government this month that it would pause fulfilling a technology-related agreement between the two countries, which included more collaboration on artificial intelligence and nuclear energy, according to two people from there with the decision who were not authorized to speak publicly. The move came because American officials felt that Britain wasn't making sufficient progress in lowering trade barriers as promised in the May trade agreement, the people said. Earlier this year, when Prime Minister Kier Starmor of Britain was courting Mr. Trump to avoid punitive trade tariffs, he delivered an invitation from King Charles for a state visit. When Mr. Trump arrived for the visit in September, British officials were keen to show that it wasn't just about banquets and pageantry. At the time, the two countries vowed to deepen their partnership and sign the so-called tech prosperity deal, which extended research collaborations and encouraged deeper commercial partnerships. America's biggest tech companies announced more than $40 billion in investments in Britain for

AI, data centers, and other technologies. But the language in the tech deal between Britain and the United States said it only, quote, becomes operative alongside substantive progress being made to formalize and implement the May trade agreement, which was called the Economic Prosperity deal. Now the Trump administration has argued that Britain has made insufficient efforts. It shows how the administration is continuing to leverage trade policy to push foreign governments to make more concessions on trade and other policies. The White House has kept negotiations with countries open months after the president has proclaimed that deals were done. Some of the terms in Britain's agreement were particularly loose, while there were firm commitments to lower tariffs on British cars exported to the United States,

up to a quota, and to increase American beef exports to Britain, other issues were left unresolved. Those included the United States' desire to increase agricultural exports and for Britain to loosen its food safety standards. American officials have also expressed frustration with Britain's online safety rules and digital services taxes. The agreement said the two countries would plan to work constructively in an effort to enhance agricultural market access and negotiate an ambitious set of digital trade provisions. In the subsequent months, Britain hasn't made changes to its digital services tax, which raises most of its money from big American firms like Amazon and Google. There also hasn't been a new agreement on food exports, end quote.

The what would this be second mini tech recession of 2025 continues this week, apparently, shares of Broadcom, Corweave, and Oracle. All companies tied to the AI infrastructure buildout have extended last week's declines. Oracle is now down more than 46% just from September 10th, quoting CNBC. While the three stocks are still all solidly up for the year, Corweave held its market debut in March. The most recent trend suggests that investors are concerned about whether the returns on investment will ever justify the level of spending taking place. It definitely requires the ROI to be there to keep funding this AI investment. Matt Witt Hiler, head of late stage growth at Wellington Management, told CNBC's money-movers on Monday,

from what we've seen so far, that ROI is there. Whitheiler said the bullish side of the story is that every single AI company on the planet is saying, if you give me more compute, I can make more revenue. Still, the market was displeased last week with quarterly earnings reports from Chipmaker Broadcom and Cloud Infrastructure Supplier Oracle, even though both companies beat on revenue and issued forecasts showing that AI demand is soaring. Oracle, which is now heavily reliant on the debt markets to fund its data center development, provided scant details about how it will continue to finance its commitments. The company said it would ramp up capital expenditures in the current

fiscal year to $50 billion from an earlier forecast of $35 billion because of new contracts from the likes of Meta and Nvidia. It's also ratcheting up leases. As of November 30th, Oracle had $248 billion in lease commitments for data centers and cloud capacity commitments that will run for 15 to 19 years. That's up 148% from the end of August. Meanwhile, Broadcom CEO Haktan said he expects AI chip sales this quarter to double from a year earlier to $8.2 billion, driven by both custom chips, as well as semiconductors for AI networking. However, as the company spent, heavily on more parts to produce server racks, investors are going to have to stomach a hit to profits. CFO, Kristen Spears, said on Broadcom's earnings call that gross margins will be lower for some of the

company's AI chip systems. Venture capitalist Tomaz Tonguz, who focuses on enterprise software and AI, wrote in a Monday blog post that Oracle's recent fundraising binge has left it with a debt-to-equity ratio of 500 percent, quote, dwarfing its cloud computing peers. Amazon, Microsoft, Meta, and Google all have ratios between 7 and 23%, he wrote. Dungo's founder of Theory Ventures said the other company with a notable high ratio at 120% is CoreWeave, which provides cloud computing services built largely around NVIDIA's graphics processing units, end quote. Yeah, on that last one, CoreWeave's market value has fallen $33 billion in just the past six weeks amid construction delays, especially at its Denton, Texas AI Data Center and criticism from short-seller Jim Chanos,

quoting the journal. Over the summer, heavy rains and winds caused a roughly 60-day delay at the construction site in Denton, a small city north of Dallas, preventing contractors from pouring concrete for a major AI data center complex, according to people familiar with the matter. As a result, the completion date for the huge data center cluster consisting of about 260 megawatts of computing power that Corweave plans to lease to open. Open AI has been pushed back several months. There were additional delays caused by revisions to design plans for some of the data centers. A partner is building for Corweave in Texas and elsewhere,

according to filings. The slowdown was compounded by mixed messaging from Corwee's chief executive officer Michael Entrotter, which spooked investors and accelerated the company's share price decline at a particularly vulnerable moment for the AI trade. Cori's business model involves using high-interest debt to buy thousands of advanced AI chips from Nvidia, installing them in server racks inside data centers that it leases from third-party landlords, then renting access to the chips to AI companies. As capital spending on AI infrastructure has intensified core weave, which is 7% owned by Nvidia and backed by hedge funds such as Magnitar Capital and KOTU management has become the

standard bearer for both the promise and the risk of the AI boom. Some critics point to the high levels of debt it has taken on to finance its data center buildout, while others worry that the company depends on just a handful of large customers, such as OpenAI, Microsoft, and Meadow for the bulk of its revenue. Corweave saw sales more than double in the most recent quarter to nearly $1.4 billion from $583 million a year earlier, but the company is unprofitable and lost $110 million at its most recent quarter. In early November, before the construction delays were widely discussed, and Trotter played down fears of an AI bubble at a Wall Street Journal event in Northern California. If you're building something that accelerates the economy and has fundamental value,

to the world, the world will find ways to finance an enormous amount of business, he said, adding that the high number of buyers of data center computing services had convinced him that there is not a bubble inflating. On November 10th, Entrotter spoke to investors during a quarterly earnings call and delivered a confusing, contradictory message about the construction problems. At one point in the call, he attempted to quash a string of questions about the delays and their impact. There was a problem at one data center that's impacting us, but there are 32 data centers in our portfolio, all of them are progressing to one extent or another, he said. He said that this one data center will catch up and then we will move forward from there.

That statement was inaccurate, however, and Intrador's chief financial officer, Nittin Agrawal, quickly corrected the CEO and said that the delays were concentrated at one data center provider rather than just one singular data center suggesting a more widespread problem. At another point, Entruder described construction delays as systemic challenges that are very frustrating for our clients and said the company was trying to diversify its supplier base of data center builders to soften the impact of inevitable delays, end quote. Study and play.

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essentially exiting the EV business again, canceling the electric F-150, etc. But what does Ford plan to do repurpose its U.S. battery manufacturing capacity to launch a battery energy storage business for, you guessed it, data centers. Quoting TechCrunch. Amid Ford's shift away from making large electric vehicles, the automaker is adding a new product line to find a home for its batteries. Ford said Monday that instead of scuttling plans to build the batteries for those vehicles, it will pivot that capacity to a new battery storage business. Those storage systems, which will use cheaper lithium-iron phosphate batteries, will be used to power data centers and help buffer demand on the electric grid.

Ford says the battery storage systems will start shipping in 2027 and that the company plans to build 20 gigawatts of annual capacity. Ford will invest about $2 billion into the new business over the next two years. Under the plan, Ford will repurpose the existing manufacturing capacity at its Kentucky factory. Ford plans to produce LFP batteries using technology license from China's CATL, as well as battery energy storage system modules and 20-foot DC container systems at this facility. Ford will join a number of automakers that are operating in or planning to enter the battery storage space. Tesla has spent the last decade selling battery storage products and deploys around 10 gigawatts

every quarter. General Motors also has a set of home and commercial battery storage products. Lisa Drake, Vice President of Technology Platform programs and EV Systems at Ford said the predominant opportunity for the new business will be commercial grid customers. But data centers will be secondary and then Ford expects to offer some home storage products as well, Drake said, end quote. Finally today, Business Week has a deep dive look at how the rise of AI has divided Hollywood. Some in Hollywood oppose all AI use while others say they are exploring ways to utilize new AI tools. Some of you know I went to film school in college, and it's kind of one of those things. Twenty years later, the people you went to school with, some of them are actually successful in the industry.

And this article tracked with what I hear from a lot of my friends. Quote, while development executives use ChatGBTD to analyze scripts and marketers use it to assist with creative campaigns, many of those same people are worried their companies will use AI to eliminate their jobs. A growing chorus of filmmakers has come out against generative AI, including direct Guillermo del Toro, who said on October that he'd rather die than use the technology in his films. This tension could well boil over in the coming year. December saw the industry's biggest move yet with Walt Disney entering a licensing agreement for OpenAI's SORA and investing $1 billion in the company.

Until now, studios have been eager to tout the potential benefits of AI to investors, but afraid to divulge their biggest experiments, lest they antagonize talent and alienate labor unions. writers and actors went on strike for months in 2023 animated in no small part by concerns over AI. Those contracts expire again in 26, and Hollywood is bracing for another potential labor stoppage. Most of the studios have been too timid, says Amit Jane, CEO of Luma AI, a leading video generator. They're scared to talk to their filmmakers or to bring AI to them. They have also been wary of AI's potential impact on their most valuable assets, their film and TV catalogs. There is a recognition that you can't put the genie back in the bottle, says Aaron Moss,

a partner at Mitchell Silberberg and Nupp, and author of the blog Copyright Lately. These lawsuits take a long time to resolve, he said, of many lawsuits that the industry has filed against AI startups. The most effective tactic is to impose limits through negotiations and find ways to utilize the technology. AI could produce useful tools that make films look even better. It could also reduce the cost of production, which has ballooned in recent years. Actors, writers, and directors are worried AI will devalue human work and jeopardize their livelihoods, and they are sounding the alarm at the same time studios have started to talk about their AI moves. Knives Out director Ryan Johnson told the Hollywood reporter that the technology is

making everything worse in every single way. At a recent film festival in Marrakesh, actress Jenna Ortega and filmmakers Bong Joon Ho and Celine Song all spoke out against the use of AI with Ho, joking that he would organize a military squad to destroy the technology. While the Hollywood workers at immediate risk are those in less glamorous jobs like animation, visual effects and makeup, the implementation of AI could be stickiest when it comes to on-screen talent. A studio owns the rights to a movie, but it doesn't own the rights to Tom Hanks' face or Lady Gaga's voice. And while there is an established legal framework for copyright, the rights to publicity, name, image, and likeness are much fuzzier.

Talent representatives at major agencies, management companies, and law firms are studying the potential implications for their clients. Kevin Yorne, a prominent entertainment lawyer, demands clauses in every client's contract to govern the use of digital replicas and synthetic likenesses, ensuring that a studio can't keep using a digitized version of them for future projects without permission. He's even filed with the Copyright Office to secure the voice of one of his clients an uncertain legal maneuver. AI means someone can recreate your voice, your face, your movement, your cadence, your entire persona from past performances or scrape media without you, says Yorne, whose clients includes Scarlett Johansson. That star, who played an AI love interest in the movie Her,

claimed Open AI mimicked her voice in that film for its voice assistant after she declined to participate in the project. As Yorne sees it, AI poses an existential threat that, quote, collapses the boundary between a person and a file. Despite his reservations, Yorne is also urging his clients to experiment. Matthew McConaughey, another client, recently teamed up with the startup 11 Labs so it can clone his voice. McConaughey also invested in undisclosed amount of money in the company, which could help big stars make even more money than they do today by introducing a new revenue stream. The actor has already served as a spokesperson for Uber Eats and Salesforce and a voice actor in Sing, but what if his voice could be licensed by any advertising company or studio? AI isn't a theoretical thing.

Yorne says it's already embedded in how Hollywood is operating now, end quote. nothing more for you today talk to you tomorrow all pay off your home travel for life drive a Ferrari in celebration of the world premiere of the monopoly big board bucks slot machine by aristocrat gaming Yamava resort and casino at San Manuel is giving one person

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