Benedict Evans
Independent technology analyst based in London, covering mobile, media and AI for over two decades.
“There's this slightly bizarre argument from NVIDIA that the chips are fungible, so if this NeoCloud goes out of business, they can sell the chips. But if they've gone out of business, it's because you can't pay the interest by selling the chips. Imagine I'm an Uber driver and I've bought a car with a loan, but I can't get enough Uber rides to pay it. The person who sold me the car says, that's okay, somebody else could drive the Uber. No, that's not why I can't pay off the loan. There aren't enough Uber rides.”
Another Podcast · Tech Strategy & Big Tech · November 2026
Context
Evans explains why lenders to NeoClouds and Oracle are in a different position from lenders to Google, which has ad cash flows behind it. He mocks the idea that GPUs make gold-plated collateral: if one data-center borrower fails because AI demand is weak, the resale market will be weak too.
Transcript
…ends up as a smoking hole in the ground, which it clearly isn't, but even if it did, you still got all that cash flow to pay your debts. Whereas for Oracle or for a NeoCloud, if it turns out you can't make any money from an AI data center, well, then you're just going to have to go home. There's
no pivoting from that. Yeah, I am.
No, I mean, there's this sort of slightly bizarre argument from NVIDIA that, you know, the chips are fungible. So if this NeoCloud goes out of business, they can sell the chips. And you think, but if they've gone out of business, it's because you can't pay the interest by selling the chips. So no one else is going to either. I mean, explain this to me like I'm five. Like, I've bought this thing. It's like, imagine I'm an Uber driver and I've bought a car with a loan, but it turns out I can't get enough Uber rides to pay the loan. And the person who's given me the loans, who sold the car, says, well, that's okay because somebody else could drive the Uber and pay off the loan. Like, no, that's not why I can't pay off the loan. If I can't pay off the loan, it's because there aren't enough Uber rides. So they're not going to be able to do it either. You know, there's a correlated downside here, put it like that. Which is why everybody pushed back massively on, I can't remember which NeoCloud it was that said they should be AAA rated because we can sell the chips and the chips are gold-plated collateral. Well, yeah, but no. And this is the, I think part of what's been going on, and again, you know, I'm not going to do financial markets commentary really, but part of what's been going on in the last…
Yeah, and it comes down to the thing that we always talk about. What's the value here? What are we building?
Depending on which numbers you're looking at. I mean, there's an old, you know, there's a very, very old stock market saying that there's no such thing as a bad company, only the wrong price. And, you know, back to the beginning, okay, the revenue on this thing is exploding. We really. Don't know…
To your point, we just don't know.
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