[
  {
    "startMs": 12780,
    "text": "Happy Wednesday. My name is Carmen Li. I'm the CEO for Compute Exchange, as well as Silicon Data. Um, I love the, you know, the previous session, um, we talk, they talk about a lot about the whole ecosystem, the financiers and the spot market traders and the hedgers. So what we're sitting in is really cool. I have a company on Compute Exchange. The world's actually the only neutral marketplaces for GPU procurement. We started in twenty twenty-four when there"
  },
  {
    "startMs": 42640,
    "text": "were, I don't know, five neoclouds, three hyperscalers. Um, essentially, we sort of s- will foresee, interestingly enough, the proliferation of the GPU ecosystem. So you think about stock market today, right? We try to buy and sell stocks. You can call brokers, obviously. You can call a few banks to say, \"Hey, I want to buy and sell X amount of Tesla or actually SpaceX.\" Right? And you can do that, or you can transact through your app at"
  },
  {
    "startMs": 72560,
    "text": "NYSE or NASDAQ. Doesn't mean you get the best price at NYSE or NASDAQ, just because it's more efficient. And you know the liquidity will be there. You know the trade will be settled, it will be cleared. You can get what you're looking for at the prices you're looking for in a very efficient manner, right? For capital markets and resource allocation, it's about efficiency. So in compute world, obviously now we have a huge proliferation, which is great. We have over three hundred neocloud private provider"
  },
  {
    "startMs": 102480,
    "text": "globally. We have a lot of token factories. We have a lot of API routers, which is all good for end customers. But at the same time, introduce a very interesting variable is, how do we make transaction efficient, right? Do you want to call three hundred salespeople? I mean, it's great to make friends, right? You want to talk to them regular basis. They know a lot of things. But same time, when you need compute in the next forty-eight hours on reserve contracts, it's the easiest way is go to"
  },
  {
    "startMs": 132500,
    "text": "an exchange and then go to the verified compute resources. Just like go to NASDAQ or NYSE to buy stocks, right? So that's one of the things Compute Exchange does extremely well, is we have this neutral platform. And by design, we do not own GPUs. Once we start owning GPUs, that would translate to just like NASDAQ owning stocks, translate to I have a co- conflict of interest with you and with the providers. I could cherry-pick clients, right? I could hoard"
  },
  {
    "startMs": 162440,
    "text": "relationships. Because Compute Exchange does not own anything by design, we work really well with our providers globally. Um, and one very important thing is we treat every single transaction individually, meaning we want to find you, as an end customer, the most suited compute resources. And we focus on reserve compute, forward contracts, as well as token packages. So give you some, um, high"
  },
  {
    "startMs": 192480,
    "text": "level."
  },
  {
    "startMs": 197080,
    "text": "So today, we have over a hundred verified providers, um, and over eighty thousand GPU in supply. We cover all regions, obviously ex-China. Um, our commitment is twenty-four hours turn around. The difference between us and other so-called brokers is we do verify GPUs. If it's existing reserve capacity, meaning things are actually in a functional stage, we'll verify the UIDs, the"
  },
  {
    "startMs": 227100,
    "text": "inventories, the performances. We run NVIDIA DGX, InferenceX, MLPerf, make sure you get resources you're promised to get. Um, so we're the middle, middle sort of trusted platform. So if it's forward capacity, let's say you need GPU starting Jan first, twenty twenty-seven, we actually look through the purchase orders, all the permits they get, make sure, you know, we help you do a due diligence level. Now, on the flip side, right? If you're a neocloud,"
  },
  {
    "startMs": 257019,
    "text": "your concern is there's a zillion clients looking for compute. How do you know who has the ability to pay at a scheduled rate? That's where Compute Exchange comes in. We do KYB, KYC of the clients. Obviously, you want to make sure your clients is the clients you think they, who they are. So we step in and do that kind of verification, just like any exchange would do. And everything we do in the forward markets is actually the precursor to physically deliver futures. Also, give you some context who I"
  },
  {
    "startMs": 287020,
    "text": "am, what I do. Sorry, I probably should say that. I started my career as energy options market maker, um, at DRW Trading in Chicago. So I did that for four or five years. So as option, energy market maker, everything's very intuitive. You have WTI, you have Brent, right? WTI is a physically delivered commodity contracts. Brent is cash-settled. They also have very distinct use cases. If you're looking for hedging in the financial sense, right, the, your price volatility,"
  },
  {
    "startMs": 317080,
    "text": "your cost volatility, you're going to Brent. You're looking physically procure resources, use WTI. So we're creating the WTI at Compute Exchange."
  },
  {
    "startMs": 330540,
    "text": "So the ways to buy compute through, uh, Compute Exchange right now, you can get reserve contracts, you can get forward contracts on both GPU and token. Let me explain. The forward contracts on GPU is very reasonable, right? You want something starting in the future, nothing available right now. So that's something we're doing on regular basis. Token forward, I think, can be a new-ish concept. Basically, you can think about as, um, a dedicated deployment, on-premise deployment, right? Similarly, you reserve a bare-metal"
  },
  {
    "startMs": 360500,
    "text": "GPU clusters. You reserve a cluster, but you have dedicated token deployment on top of that. So you get guaranteed, um, SLAs for that particular models. You get, um, quantization, precision, everything's fixed for you for a period of time. So we try to solve the on-demand token API volatility pricing problem here. The third is we have a huge market, open hardware market. It's really interesting. The"
  },
  {
    "startMs": 390152,
    "text": "secondary server transactions started last year when people just pinging me say, \"Hey, Carmen, I have like 20,000 H100 sitting X data center. Can you take away from me?\" So I was like, \"I don't know. I can't store in my home, obviously.\" So we started having the marketplace for secondary server sales. This has been a very vibrant market, um, for the past, I would say, 12 months. Uh, we cover, again, all servers, um, even B200. You see secondary transaction is happening,"
  },
  {
    "startMs": 420332,
    "text": "um, sometimes trading above MSRP, right? Can make sense. Think about like COVID times when secondary car is trading above, right, its, uh, brand new car price. So we cover the three major, um, layers of compute."
  },
  {
    "startMs": 437172,
    "text": "So reserve GPU, obviously, I think the previous speaker covered extremely well with the terms. The minimum we do is one node starting at one month, and then we can go all the way to three, four, five years, right? It's all depends on the availability, the providers, but you get a chance to state your preferences. Um, we don't do on-demand."
  },
  {
    "startMs": 460492,
    "text": "And another thing really works really well for Compute Exchange is we do provide a flexibility. Let's say if you overcommit i-in terms of quantity or duration, you can sell it back to Compute Exchange, right? So that's something we're coming to do, so you don't have to worry too much if you overbought."
  },
  {
    "startMs": 481012,
    "text": "All right. Second-hand live. So I will actually do a quick demo later. Um, so we have a lot of listings, marketplace listings. You can browse and chat with the providers and figure out the best delivery mechanisms. You can also RFQ if you don't see anything in like-- you liked. We actually seeing over a billion RFQ-ed every month. Sounds big, but we all know it's full compute, it's not that huge, right? But still you see the vola-- the, the, the, the, uh, activities, which I love, is"
  },
  {
    "startMs": 511132,
    "text": "we see a big range of RFQ requests from one node all the way to 20,000 nodes. So our clients are, you know, all different shapes and forms, different use cases, which is great."
  },
  {
    "startMs": 525152,
    "text": "Yeah. So you set timing, submit, and we route it. So in the behind the scene, we have inventory tracking. So with over 100 providers globally, we know who has what, roughly when, right, the forward capacity. And then let's say you, you submit a request saying that, \"Hey, I need 3,300 GPUs, B200, US East, starting Jan first.\" We say, you know, we have three providers we think they have those. We'll route it to the three. They will respond to you through the platforms, and they'll give you, um, a rubrics"
  },
  {
    "startMs": 555172,
    "text": "back, pricing, specs, SLAs. We benchmark them if it's existing servers, and then it's your choice, right? Price is not only indicator. We believe give you as much transparency as we can, and then you will make a decision."
  },
  {
    "startMs": 572152,
    "text": "So all records in one place. Again, it's rubrics coming back. You will see everything, and we introduce you to each other. We never hold relationships, right? We'll make sure you know who you're dealing with. Um, so buy tomorrow's compute today's price. So it's a physically procured platform."
  },
  {
    "startMs": 589732,
    "text": "This is the used, refurbished, uh, GPUs. So again, we have extremely, um, exciting, uh, ecosystem participants in this ecos-- uh, in this, uh, secondary GPU sales. We cover from 4090s to B200, AMD, everything."
  },
  {
    "startMs": 610752,
    "text": "Inventory is live, and we do connect with you through all different channels, Slack, email, chat, however you wanna do this. Um, we track end-to-end. We actually have scoring for everybody. We score you, our customers, we score our providers. You can't see it quite yet, but you know, will be really fun. Um, we're gonna have end-of-year celebration for our providers. We can r- we're gonna give out the best provider in APAC, best provider in Europe, best provider in US,"
  },
  {
    "startMs": 640632,
    "text": "most responsive providers. So we're gonna have a lot of provider awards coming up. Stay tuned."
  },
  {
    "startMs": 648232,
    "text": "Um, verified network, so everything's, uh, you know, verified, which is, you know, negotiated exchange. So we help in terms of be the middleman. Sometimes things are not very clear. We try to make sure people understand what's the best practices we have seen in the ecosystem."
  },
  {
    "startMs": 667392,
    "text": "I'm gonna quickly show you guys the platform. I think that's more fun."
  },
  {
    "startMs": 679272,
    "text": "Um, here."
  },
  {
    "startMs": 682892,
    "text": "So this is the platform. You can see bunch of available inventories. By the way, anyone can, can sign up. It's completely free. There's no downside using us. You don't have to buy, you can browse. You can request for quote if you, you know, interested something we don't have. You can start with your vendor type. Again, we're agnostic of GPUs. You can select your model. You can select your deployment type. You can select number of GPUs. You can select your compute interconnect preferences, CPU platforms,"
  },
  {
    "startMs": 712852,
    "text": "storages, everything you need, and then some optional items with system, software stacks, regions. Obviously, we encourage you to select multiple regions if you're open to that. You can add head nodes, tell us your use cases, anything you want, and then submit RFQ. So this has been extreme robust, and then we, you know, we obviously we want to make sure, um, if you have any feedback, let us know. So I'm going to pause on Compute Exchange side. Um, I think I have some time left,"
  },
  {
    "startMs": 742920,
    "text": "which I'd love to show you some of the numbers we've seen in terms of term structure."
  },
  {
    "startMs": 749620,
    "text": "Also, context. I'm CEO for Compute Exchange. I'm also CEO for another company called Silicon Data. So I'm a founder CEO for Silicon Data, which is the Bloomberg for compute. So we provide indices for CME to settle their futures on, which will be happening in a few weeks. W- I'm very excited about this. So the ones going to be start trading at CME will be the H100 neocloud on-demand rates, as well as B200, um, prices."
  },
  {
    "startMs": 780360,
    "text": "What I want to show you is implied forward curve. So as I said, Compute Exchange, we do a lot of forward capacities, so essentially a lot of longer-term contracts is going to be very critical. You think about e- even in your cloud or your, your consumers. Let me just make it larger. So the yellow line was last year, right? The, the X, the horizontal line is the duration, and the dollar amount is the Y-axis. So last year was"
  },
  {
    "startMs": 810120,
    "text": "complete downward sloping curve from the yellow line, right? So meaning the longer term contract you signed, the cheaper it, you know, was per GPU power. And this year, starting early this year, the whole curve shift up and became contango, if you see the, the, the red line, right? So it translate to people not getting a discount, enough discount for longer term contract, implies that people assume the price is going to rise down the line. And now you see the price, the ter- whole term keep shifting up but got"
  },
  {
    "startMs": 840120,
    "text": "flattened, right? So meaning people will now either get penalized or get, you know, awarded by signing longer term contract. This is reserve contract we observe, and if you look at implied forward rates, this is not-- this is implied forward rates, right? Because we don't have a future trading, so this is calculated based on our term structure. Um, and we use similar methodology as Treasury futures curve. So you can see market consensus view is the price could go up next in, in the"
  },
  {
    "startMs": 870060,
    "text": "future, next thirty-six months. Again, market consensus doesn't mean it's right. If you look at B200, again, last year was contango, and this year it's-- the whole curve shifted up. Every single term is more expensive, and it's got flattened, right? Implied forward rates, similarly, people think the price is going to go up. I want to point this out, the term structure out, is this shows you that GPU is behaves just like every commodity,"
  },
  {
    "startMs": 900080,
    "text": "have a very clear term structure risks, which data futures are excellent at hedging. So we have seen a lot of block trading happening around the term structure. So you think about this, right? If you have servers on your balance sheet, you have financing obligation for next five, six years, and you have reserve contracts for first three, then you're exposed essentially year four or five or six, right? So you want to hedge that risk out by entering, you know, swaps or block trading."
  },
  {
    "startMs": 930700,
    "text": "Um, so those are things. Or, or there are, there are trades happening even for the first three years, which you have reserve contracts on. What if the reserve contract defaulted, right? What's your, um, guarantee from some of the players? So we saw block trading happening around the indices trade as a floating rate."
  },
  {
    "startMs": 955040,
    "text": "This chart, um, actually is being, uh, used differently by NVIDIA team. Um, NVIDIA's latest, uh, um, September investor day deck, they said us were the only data provider they actually cited in their deck. Um, this is very interesting. Silicon Data becomes the appraisal for a few banks when they have GPU servers on their balance sheet. Um, this, everything you see here are forward-looking view, right?"
  },
  {
    "startMs": 985040,
    "text": "So discounted cash flow. So as I said, we have a term structure, so assume A100s, right? A100s have been around for six years. If today you sign a three-year long lease on A100s and you have a rate, and we discount the, the cash back to times zero, you have how much the asset's worth, right? Obviously, there's a lot of things baked in, utilization rate, what is your cost? There's a bunch of as-assumptions which we're pretty transparent about. Um,"
  },
  {
    "startMs": 1015140,
    "text": "we actually calculate the residual value for normalized value, obviously, across all A100, H100, B200 servers globally. And then we compare that with the straight-line depreciation, which is everybody using the five-year depreciation. What's interesting is the A100, right? Even though it is downward sloping, uh, you know, it means the things are depreciating, but it's above the accounting depreciation curve, straight line. And the H100 obviously is, you know, it's going, going bananas now on the"
  },
  {
    "startMs": 1045000,
    "text": "price actually went up. My as- my analogy will be just like secondary cars during COVID time. The price went up, right? And B200 obviously went above its MSRP by this point. So this is gave some, give you some views about what's going on in the residual value side. I think I'm out of time, but, you know, feel free to grab me, Carmen, cli@, uh, computeexchange.com, cli@silicondata.com. Feel free to grab me on Twitter, carmenli is my Twitter handle."
  },
  {
    "startMs": 1075000,
    "text": "Just Carmen Li. That's it. Thank you."
  }
]