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“There's 500 proposed legislations to stop data center building in the United States alone, including Texas, right? Like if you can't build a data center in Texas, I don't know what we're doing anymore. If that regulatory pressure continues and you actually can't break ground … then either you go international or you go into space.”

Invest Like the Best (Patrick O'Shaughnessy) · Money & Markets · November 2026

“There's 500 proposed legislations to stop data center building in the United States alone, including Texas, right? Like if you can't build a data center in Texas, I don't know what we're doing anymore. If that regulatory pressure continues and you actually can't break ground … then either you go international or you go into space.” — Martin Casado, Invest Like the Best (Patrick O'Shaughnessy)

Context

The host raised the idea that orbital compute is inevitable. Casado says space data centers do pencil out, but the strongest reason for them is regulatory: the wave of local bills against building data centers on the ground.

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Transcript

Invest Like the Best (Patrick O'Shaughnessy) Around 43:17 into the episode
Martin Casado

The actual space thing actually pencils out, but the reason it makes the most sense is just regulatory.

Patrick O'Shaughnessy

Just because it skirts it.

Martin Casado

Yeah. There's 500 proposed legislations to stop data center building in the United States alone, including Texas, right? Like if you can't build a data center in Texas, I don't know what we're doing anymore. If that regulatory pressure continues and you actually can't break ground, and I've heard from many of the top data center people, like it's very tough to break ground right now, then either you go international or you go into space.

Patrick O'Shaughnessy

Your comment on these software companies growing 60% reminds me to ask about prevailing valuations in the market. And as a productive investor that's focused on disruptive assets being created, even if the disruptive asset is truly incredibly valuable and great, every one of those has a price that…

Martin Casado

So this is another one of my bugaboos. I don't know how you can be a VC and not believe tech creates value, which is the first conversation. Yeah. Now I'm going to have a second conversation, which is, I don't know how you can be a VC and not believe markets are efficient. What are we doing? Like…

Patrick O'Shaughnessy

Doesn't it follow, though, that then the approach would be to actually try to index the private markets? Like you just try to own literally the market weights of. Oh,

Speaker names come from our own diarization. The position is estimated from where the line sits in the episode.

More from Invest Like the Best (Patrick O'Shaughnessy)

“I can't really think of many times in history where an easy strategy turned out to also be a good strategy long term. So I think that's the interesting thing about this market: if everybody believes that's an easy way to make money, it's probably not a great way to make money.” — Ramtin Naimi, Invest Like the Best (Patrick O'Shaughnessy) “I think there was going to be like two or three great Neolabs. And now there's probably 80 or 90 Neolabs that have raised somewhere between $1 to $5 billion. … We met a Neolab a couple of weeks ago that was raising $1 billion, I think this was their second round of financing, and they were going to spend the entire billion next year on compute for one training run. And they said they would probably need to raise another $5 billion throughout next year.” — Ramtin Naimi, Invest Like the Best (Patrick O'Shaughnessy)