Tokens & the New Oil
“The energy sector is often viewed as one that should be traded - and isn’t investable - like other sectors” - Toby Loftin
Editor’s Note: I’ll be writing on this topic for a few weeks.
THE ANALOGY.
It’s been a minute…
Since I last wrote, a new - multi-trillion-dollar - market has emerged at an unprecedented pace.
The token market is on a course to rival the US mortage and oil markets in size.
The most common analogy - and a poor one at that - has been to the Telecom Bubble (and Bust) of 2001.
All the while, the obvious parallels have been to the development of the oil market, at the inflection of the automobile.
As gasoline is to transportation, tokens are to intelligence.
Google is the only vertically integrated player → an Integrated Token Company (ITC), per se.
Amazon & Microsoft are increasingly concentrated in the Midstream Token market.
Meta (fka Facebook) has ambitions to play in the Midstream & Downstream Token markets, while SpaceX has quickly entered both - as a serious player - in a matter of months.
PRIMERS.
I’ve strangely found myself, as a long term - nearly 10 year - shareholder of Amazon & Microsoft, having personal equity exposure to this generational inflection.
And I could not answer basic questions about “what this inflection means”…
Back in April, Thomas Kurian, the CEO of Google Cloud (not known for hyperbole) made the following statement about Token Demand:
“I think for the next 10 years there will always be more demand than supply.”
Is it tradable, or investible?
And where does that distinction lie, across the vertical?
Kurian’s statement & a combination of self-interest & curiosity were the catalysts for what follows.
I wrote two Primers on the Midstream and Downstream Token Markets, as well as a deep-dive on SpaceX (a firm that - on the AI/token side of things - is operating in both).
Today, I’m sharing the first - a primer on the Downstream Token market, titled Frontier Labs: The Economics of Intelligence Production.
Later this month, I’ll share a primer on the Midstream Token Market
And if you’d like, email/DM me for a copy of some work on SpaceX
OTHER.
I have money (rather boring) on France to win the World Cup
I would love to be talked out of this bet & into another
If you have a better World Cup bet, would love to see it
Matt