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Welcome back to Blockspace Live, brought to you by CleanSpark. You've got Charlie and Will discount Colin. Yeah, yeah, Colin. I know where he is, but he's out there in the field in the arena getting stories for us because the stories are numerous. The big One today is SpaceX IPO and we're going to talk about how it's really not a rocket company, it's a data center company in a rocket company costume. Also, we got Andrew Burchwell of the Ohio Blockchain Council in the house to talk about what else. Data centers in Ohio. Then we've got Tom Masiero of Sphere 3D in the house. More on data centers and what Sphere is up to. Probably non hyperscale data centers. Then we've got Cole Kennelly to talk markets. A doozy of a day. Markets are a bit down, but Blockspace goes live, as you know, every single day, every weekday at 1pm featuring quick hits on the latest in AI data centers, some bitcoin and crypto and emerging tech.
C
Will yeah.
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If you are listening to this on the Coindesk podcast network, we are departing these lovely shores for the foreseeable future and heading out on our own. You can go to block space on Spotify, Apple, Castro, wherever else you are listening to podcasts and just hit that subscribe button, hit that bell notification. So you always get announcements about when we go live with new shows, which is every single day. If you're catching this on the live stream, it's 1pm Eastern. If you are listening later, it's typically around 5pm Eastern. And yeah, we're hitting all the news updates. So if you want to continue with us, which we think you should, then jump on over to our new podcast player and give us, of course, five stars. Charlie.
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This show is brought to you by Clean Spark Nasdaq listed ticker CLSK. More on CleanSpark later on in the show. Let's kick it off. We could talk about how the markets have pulled back a bit. Will. We could talk about how bitcoin has absolutely pooped the bed, to be a polite colloquialism. But we're going to Talk about the SpaceX IPO because they dropped their S1 yesterday or an amendment to the S1 yesterday and revealed a number of things. I think more than that is Elon posted a nice little hype video which guess what, talks about data centers in space.
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Here's a clip model and be able to capture all of that value. And so that's exactly what we did. We now have the world's largest coherent supercomputer with the Colossus 2 data center that we stood up with Best in class compute GB300.
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Specifically from Nvidia, we have the first
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gigawatt scale training cluster, the first gigawatt
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scale megapack battery installation there as well.
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And first to deploy the the GB 2 hundreds and 3 hundreds at significant scale. And so, you know, having a gigawatt of nameplate compute draw is really compelling for us.
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Yeah, gigawatt of nameplate compute. One thing that SpaceX definitely has is the power and the compute, which is why they signed this deal with Anthropic. So Will, let me review the high levels of what we Learned from the SpaceX S1 and then I'll throw it to you for some commentary. So they filed their S1 on 6-1-2026. It's public now. The company plans to fix the IPO price at $135 per share. Sell 505 55.6 million shares, raise a record 75 billion at a $1.75 trillion valuation ticker would be SPC X. And they're currently on the roadshow promoting the IPO. So at $1.75 trillion, here's the, here's where it stacks up. SpaceX will be larger than Microsoft. It would be behind only, I believe, Apple and Nvidia. And that is despite SpaceX posting a $4.28 billion net loss in Q1 alone and an accumulated deficit of like $41 billion. So another takeaway is that apparently retails are. Investors are earmarked for 30% of the float, which is three times the standard for these mega cap IPOs. Will, what are your thoughts?
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Retail. It's a ton of retail. I mean, for us, I think the data center part is probably the most interesting, at least for our audience. And I think what we care about, luckily for us, I think the data center part also like undergirds the entire future of the business. So if you look at SpaceX right now and what they're doing with Xai and everything else that's been wrapped into it, a lot of the revenue is coming from Colossus and what they've built out with their data center campus in Memphis. And then if you look at the SpaceX S1 and the IPO information, we ran this article talking about how the AI Compute satellite is a new term that they're throwing out there in their prospectus and it's kind of like on the books now that this is a commodity or it's a new product that they're going to launch. Obviously, Elon has talked about this in the past quite a bit, and there's been tons of people on Twitter talking about this. I mean, we've even seen people talk about bitcoin mines in space. Right. For quite a long time, and talking about how the thermodynamics are better because there's no heat in space and just dissipates. A lot of this stuff isn't true. Doesn't matter. What they're trying to talk about here is a vertical integration between being able to launch these rockets into space, add the data centers into space, where there's 24,7 power through the sun, and then be able to use GROK on these giant data centers and kind of own the entire data center landscape that way, which is a huge market. Right. I think some people look at this and they kind of scoff at it. But this is very like Elon, right, where it's, we're not going to be the best data center company. We are going to make every single data center company obsolete by launching data centers into space and having essentially no cost for running them from the energy standpoint and then trying to figure out how to recoup the costs on the rocket launches over and over again. So that's a pretty cool part. And I expect we will be talking a lot more about the extraterrestrial data centers on block space. A lot more.
B
Yeah. It's really fun to talk about data centers in space. Elon's been selling the vision, and the vision is actually, it's pretty obvious when you look at the SpaceX, the SpaceX numbers. Here are the numbers. So last year, SpaceX's total 2025 revenue was $18.7 billion, which sounds like a lot. The majority of that was Starlink, about $11.4 billion. But as you may know, Anthropic just signed a deal with SpaceX to use their Colossus 1 data center in Memphis or just outside Memphis, Tennessee. And that deal would net SpaceX about $15 billion per year. So the number is like, pretty clear of SpaceX's $18.7 billion revenue last year at 15 billion per year with just anthropic alone, that's 80% of their entire revenue from last year. So it's no wonder Elon wants to say what were really a data center company that shoots data centers up into space via our rockets.
A
Yeah, some of the other stuff is kind of crazy. The float that you mentioned, 30% is for retail. I mean I think that does show us where we're at with retail trading. Just the exuberance. Twitter itself, X which they own, has become a stock trading platform. It's kind of like stock twits and Yahoo Finance all mixed in one with a a feed in it now. So makes sense that they're kind of like building all these things together. You just got to go for where their money is. But yeah, this article we threw up on block space, which you can go read right now, does talk a lot about that data center landscape when it comes to SpaceX.
B
Yeah and there's a lot of questions like data centers in space, what does the latency look like? Because we think about inference is very latency dependent. The, you know, where does the cooling come from? Would these operate in low earth orbit? I heard Elon talking on a podcast about how his kind of one of the big reasons he likes data centers in space is because you don't have to go through all the permitting. And also I don't think you have like the noisy neighbor problem or the NIMBY problem in space. It's kind of ironic that maybe the reason to go to space is not rather an engineering one, but perhaps a regulatory and just how what's the easiest path to execution. But you still got to figure out how you cool those. I don't know how that works. I'm skeptical. Any last thoughts on the SpaceX IPO will
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I think the day of will be crazy and maybe the aftermath. We'll see if all the liquidity does get pulled out even more so bitcoin and other speculative tech assets because these IPOs.
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Yeah, I think as long as there is giant mega IPOs on the horizon if you own things like Bitcoin like myself included. Going to be in for some more pain but we're going to keep rolling. We have Andrew Burchwell on next from the Ohio Blockchain Council. He's going to talk about what's going on up there. Data centers of course. But before that, a word from our sponsor, CleanSpark.
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and a reminder, we are leaving Coindesk. So if you are listening on Coindesk, subscribe to the block Space feed. Search block space on whatever platform you're on and subscribe to that feed so you can keep listening to this content. All right, let's talk Ohio. I'm going to bring on Andrew Burchell. Andrew, welcome back to Blockspace.
C
Hey, good to see you boys. Can you hear me?
B
Yeah, sound great.
C
Good to see you.
B
Likewise. So you have, we've been covering like the data center pushback a lot. I've been pulling up, you know, boomer posts on Facebook because when you leave Twitter, you go into normally social media. People are not just apprehensive. There's some cross ideology vitriol against data center. So let's talk about public policy messaging. First of all, I think let's just go into how it relates to Ohio. I saw there's a local news story from featuring, I think bit deer mainly and their data centers. And you had a senior project manager reference Senator Moreno who said that taxpayer funded giveaways shape. He was criticizing taxpayer funded giveaways and it shapes the no incentive stance. Explain this to me levels here.
C
Okay. So you know, you have this bittier moment where you can look at a single company example, like bittier. And I think at this point they're saying they're going to spend $20 billion in the US in the four year sort of Trump cycle. Half of that's going to be in Ohio. So we're ground zero for the current moment of the boomer post. Right. And the boomer post goes all the way down to the it's the sign on the side of the highway when you're in rural places. And if you drive to enough places, you'll drive through this and you'll see that it's everywhere. And it is, I would say, cross party. It is cross generation. And it is probably even though maybe they're not going all the way quite yet. One of the largest political activations I've seen in some time just in terms of what are people paying attention to. So then you find yourself, if you're okay, take the other side of that. You're the politician, not the citizen. And you're sort of thinking about how do I be a politician in the current moment? And every single one of them is getting hammered on this topic and they're really just like, well, what's the solution? How do I think about it? And behind the scenes, and I would just say this is my opinion and I'm not speaking for anybody up to and including any United States senators, but I think a lot of people are saying, hey, these things are actually pretty good for us Generally, right. Pro energy compute is good. We think that we want these things developing our especially the rural, impoverished, de industrialized places, especially in the Midwest, particularly where we focus on here in Ohio. And yet we're balancing the tension of big tech. And what does it mean when these large things come in and are consumptive? People think they're extractive. Right? And we've seen this over and over again on an industrial cycle. So I think the middle ground I'm seeing right now is we're not necessarily from a political perspective taking a pro data center stance, but we are taking a where's the reasonable nuance but not a moratorium stance, which is really where Moreno is aligning himself to say we want this but we're no longer going to give you the handout we tried to give you 10 years ago when we were really trying to get you to come here. And the thing in Ohio that's happened is we created a sales and use tax exemption, right? And we said, well, we think this will drive business development to the state. Ten years ago we were desperate, we were begging people to come to the state and then lo and behold, that works, right? And so now we have a lot of data centers and then they're all taking advantage of this sales and use tax and then the number goes crazy. It's, you know, we thought it was going to be 150 million, now it's 1.5 billion or something. And then everybody, citizens alike are going, well that's way too much. Wait a minute. These are trillion dollar companies that are saying they're going to use all of this compute to take all of our jobs. What are we doing here? That's a bad deal. We're not going to take that. So finding the nuance right now is really difficult, but I think it's super important. I think this is what bitcoin mining, particularly in the early industry, the last five years or so, because we've already dealt with this bit deer and the like can come out in front of this and go, yeah, we've already learned those lessons. We already know what we need to do because we spent $5 million on a noise abatement solution, right? Like we're willing to work with the community. I think it was Paul who you were talking about does a really great job of literally just going to these places and part of them and I think groups like that in the current moment who are willing to say, yeah, we don't, we don't want any tax abatements in that way, you're going to make enough on revenue, taxes and other local, you know, taxes for the community that we will happily also pay the sales and use to the state. There's no if or at that point. But it really is just how do we, how do we find a reasonable middle for people so that we're not getting impeded? Because right now, if we, if we slow down in any sense, we're going to fall behind in a lot of ways. And that's not just compute. That's energy. That's globally. And frankly, I mean, just to use the bidder example specifically, they have three sites that are known in Ohio. One of them is moving forward pretty well. I think a pretty substantial percentage of hash rate is sitting in Massillon, Ohio right now. And the mayor of Massillon is looking at the other two facilities that are dealing with some local consternation right now. And those facilities haven't been built yet. The mayor of Maslin is going, look, if they don't want them, we'll take another one. They already see the realized benefit of it. And you will too. If you go there, by the way, and you see the new substation they built and you look at the one that was built 70, 80, 90 years ago, and you're like, oh, okay, I can see how this is good for my community.
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What's the disconnect then? Because I think when we look at the larger picture and you see this pushback on it, yet I walk down the street, I know that everyone's scrolling their phones all the time using these data centers. And then we also know that people need jobs in these areas. Why are people not quite getting it? Why are people still pushing back on it? Is it really just come down to, like, they want to have their own wheels creased?
C
Oh, yeah, well, that's part of it. I mean, I'm not going to make that a personal claim. I think everybody's looking for incentives. And for a while a few months ago, it was very much, well, how can we get the data center companies to pay for a lot of stuff, right? That could be infrastructure upgrades on the grid. That could be, you know, communal investment, whatever it is. But it is kind of coming, you know, to take your, your couple of pieces at that point. I think it's past that now. I think culturally, people are noticing that their lives are out of their control. And I think in a lot of sense, this is my personal opinion, but when people look at big tech and surveillance and censorship and all the things that have happened and are possible and can continue to get easier with these tools. They rightfully say, I'm not sure I want to buy into that completely. And they want to understand how they can be protected from it. And therefore they're right. Like, I don't think this is just a, a miseducation or a boomer post thing. I think this is like very meaningful stuff happening right now. And I think the messaging has been so poor from the top down because most of the time it's a commercial enterprise. And now we're seeing the IPO moment. And if I'm anthropic, am I trying to scare people so I can raise the value or, you know, play some game in the, you know, public capital markets so that I can boost some potential I have in an IPO setting or whatever. It might be. Like there are all these things that aren't good for the farmer in rural Ohio as a particular example. Right. So the disconnect to me is less that people are resistant to the tools. It's just that I don't think we're actually doing a very good job of saying, here's how these tools actually will help you. And instead it's these tools are actually going to take your job and all of these other things that are disastrous. And I think it's really simple to say these people are missing the point and being influenced by foreign persuasion and all of these other things. But I think until we realize that actually there's a meaningful thing here, which is people are looking at the global state of things. This takes me all the way back to fiat. We don't talk about Bitcoin enough in this moment of, wait a minute, why are people so upset? Well, it's because the money is broken and all of these things are downstream of all of those things. And until we bring it full circle, I think people are going to continue to look for that scapegoat. And I will say this is the last thing because we sit in the middle of this as a politic. Utilities and entrenched interests are very good because they've had a long time to practice they at getting people not to notice the ways in which they are the problem. And the utilities have done a really great job of saying the data centers are the reason why our grid is fragile and broken and nobody knows how electricity works. And so it's very easy to just say, you know, it's over there and it's this new. But it's no, it's, it's 50 years of perverse incentives and malinvestment and just Corruption outright, frankly. And we saw that directly in Ohio with House Bill 6 and other scandals. So, you know, I think people are just like, it's, it's fatigue. And they're like, okay, stop. You know, let's, let's the classic, like, let's get our hands around this. And it's like, well, we can't actually do that. So what's the middle way here? And it's actually, let's try to use these tools and think about how to actually empower people with these tools. And to me, that is like local scale, that's like 20 megawatt to a hundred megawatt scale things and not gigawatt scale things because I think no matter what, big, large, looming will always be more problematic than things that are small, modular and different.
B
That's a perfect tee up to our next guest, Tom Masier, who's in the wings. But I want to ask you a couple more questions.
C
Sure.
B
So I, I'll, I'll push back. Like, you know, three of us, we've been in the data center game, me and the bitcoin world for a long time. So we're, we, you know, are probably a little biased. But I want to, I want to examine like, what are valid concerns from the public on this? Because a lot of people are obsessed with water use. To me that seems like a spurious claim largely. Is it power rates? Is it maybe that the pie is being baked in their backyard and they're not getting a big enough piece of it? Like, what are the valid concerns that the public might have?
C
I think the valid concern that I have that I'll just say maybe we can run with a little bit here is when tools become sophisticated enough at scale, we lose the ability to properly govern them. And I think that's why Bitcoin. Right. Like, I think we looked at protocol and we think about how technology manages systems of decision making, and that is in essence, governance. When we do this and when we do this quickly, I think there is actually a real risk that we can put ourselves outside of the bounds of business as usual pretty quickly. Look at the example of anthropic going to the Catholic Church. Right? Like large scale global institutions who have normally been tasked with maintaining order are now looking at these tools and going, ah, well, we can do this much better and faster now. And the Pentagon is grappling with how do we use these tools, how do we maintain hegemony of the best tools to defend ourselves? That's all governance to me. And I actually think that is the Most legitimate criticism of scale at any cost. Which is why I think the middle tier players have such an opportunity here because they aren't maligned by algorithmic bias. Right on the right in Ohio, most people are mad at Google Meta, Amazon because of the way the Instagram Facebook meta algorithm moves people poorly and inarticulately and maybe to the detriment of what you might think is a proper society. Right. Like people are being pushed into the extremes of thought and it's an algorithm we don't control. And so I think we should rightfully be weary of any idea of anybody doing anything at any time. However, as a free markets guy, right, where's the tension? It ultimately comes down to who has control, who has authority, who has responsibility for these assets. And I am a big believer that actually the local communities should be stakeholders to some degree in these projects. I think Tom will come on next and say a little bit about that. I think we're all sort of coalescing around this theme of actually instead of it being something that could be looked at as purely extractive, even if the water's closed loop, even if it's off grid, even if you're not affecting anything, the community is still going to go, do we want this in our community or not? And I think they should. And I think we should do a better job of trying to get them to be on our team from a compute perspective. But there are also many teams and I don't think I'm going to sit here and say that Anthropic is the same as Google, is the same as CleanSpark or Bittir or Mara. Right. Like these are all actually different approaches to the philosophy of markets. And we shouldn't lose sight of the fact that in markets, people don't always act rationally. And that's just something we should come to expect in a more free system.
B
Andrew, thank you so much for coming on the show. Really appreciate it. I wish we could have you on more, but we have guests lined up. Andrew, you are welcome back. Next time we want to talk Ohio policy and protocol. Thank you so much.
C
Good to see you guys.
B
All right, we're going to keep rolling. We have Tom Massiero and then Cole Kennelly on. But before we bring Tom on, a word from our sponsor, Luxor. This episode is brought to you by Luxor's Commander Bitcoin miner management software built for enterprise operations. Commander gives you real time fleet monitoring, bulk remote commands across your fleet. And intelligent Miner, an automated profitability engine that runs every Five minutes. Adjusting power settings to live hash rate and energy markets. ERCOT back tests show over 10% more profitability versus binary mining. Commander Pro is 100 bucks per megawatt or a 25 basis point pool fee adder which is roughly half the price of competitors with a 60 day free trial. Get started at Luxor Tech slash Commander. Okay, let's bring on a friend of the show, friend of the show, friend of the show. Tom. Tom, welcome back.
D
Hey guys, nice to see you guys.
A
Nice to see you too. So we brought you on for the hot segment. I was teasing you this morning on Telegram but we got a few video clips. We want to get some reactions we from you with. But before we do that, let's talk about the announcement you guys had on Monday with the combination of Cathedra and Sphere 3D now trading under the ticker any which is having a huge week. Tell us a little bit about the integration and why. You can't really tell us why the stock is up but maybe more generally speaking like why is the market liking companies like Sphere 3D?
D
Yeah, I wish I could say like we were geniuses in you know, setting up the timing on this whole thing with you know, bitcoin profitability and you know, mining sort of being at its like worst levels possible. And then you know, some of these smaller bitcoin mining infrastructure companies signaling to be ready to essentially, you know, pivot their assets over into AI Compute. And I, I think, you know, the, the process that it took for us with, you know, with this merger, it's like six months and so the last, I would say like two or three months. Joel and I have been, you know, on calls almost, I mean every day, multiple calls a day, engaged with every single layer within AI Compute. And it became very clear that this was like a real thing. And so, you know, maybe a couple weeks before, you know, the merger was set to be finalized, it was, you know, it was clear that we were going to be heading in this direction. And so we start to try to, to get that story out and to have it be clear with what we're doing, which is just an assessment of where we're at looking at bringing in folks who have done this at larger scales and have worked with the different counterparties involved. And this week the deal was finalized on Monday and I think there was some fortuitous timing with DMG blockchain same day came out with their similar size in terms of one of the sites that they have announcing institutional grade investor with, you know, with a backstop and that sort of kind of legitimized, I think folks in our, I guess like the cohort in our segment that this is like a legitimate thing and now it's up for, for everyone to, you know, go and execute.
A
Yeah. We had Steve and Sheldon on earlier this week. Talk about 50 megawatt investment grade deal. And this is the big question, right? In AI data center landscapes, do you go big with the hyperscalers, the 1 gigawatts or can you go smaller, modular? And maybe the thesis gets played out on both sides. There's certainly companies are pursuing both in tandem. Let's watch this video. This is from the head of compute@OpenAI and I want to get your reaction to it.
F
You know, one of the, one of the, maybe the other dimension Sachin is training. The shape of the training workload, as you said, is fairly synchronous. It is typically coordinated. You need a coherent cluster. It goes up. Right. All at the same time. Inference, on the other hand, does not seem that way. It's likely much more spiky, a lot harder to forecast maybe. And as that changes, you might even want more compute closer to the edge to minimize latency for inference. Talk about that for a second. How do you manage the shape of your compute capacity knowing that you're moving towards an inference heavy world? Does that mean more distributed? Almost cloudflare like mini clusters closer to the edge or a giant one in
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Texas or Virginia is good enough.
F
It will get there, but it's not yet. And for two reasons. One is there are still significant benefits to scale on building this compute. So building 50 megawatts of compute is far more expensive per megawatt than building a gigawatt of compute at one location. Fascinating. Per unit basis, on a per megawatt basis. And that's for many reasons. Right? So labor is a big bottleneck around the world today, especially in the US we just don't have enough people to build these things. So getting the kind of critical human mass you need to build, you would much rather do it for a bigger scale than for little bits of 50 megawatts spread around the country.
A
Okay, Tom, reactions towards that because it's, it's the nexus of the battle right now, right. Guys like yourself publicly listed have some megawatts under management, but you guys don't have 500 to 1 gigawatt patches versus the hyperscalers. So how do you think about that?
D
I think the market will determine that. There's probably a little bit of truth to both of it. You know the problem I see is that a lot of these larger scale projects are, and Andrew was talking about this before, are falling into more of a, of a state of being jeopardized than I think some of the smaller ones. That does not mean the smaller ones don't have to deal with some of the same exact issues. So if that's being the case, I think the market will work itself out with, with a lot of this. Because at the end of the day, you know, I think I talked with, you know, with Charlie last time, it was very reminiscent of the 20, 20, 2021 Chinese mining exodus where there was such an influx of machines that hit the shores that needed homes that was all time price per Terrahash S19s selling for $10,000 each. So you're talking like 30 million bucks to fill out. A 10 megawatt site was not cheap. And prior to that there was a lot of talk among folks in the industry were, you know, around standards and buildings and containers were sort of shunned at that point. So I just think, you know, there's just like in everything these cycles will come around and the market will prove itself. You know this, the, the leader of Google's energy side of things had a like a contrary take to the OpenAI guy side of things. He was basically saying there's, there's this path for the bigger ones. And then he's like, you know, there's going to be this middle layer of maybe 50 megawatt sites that are going to be kind of clustered together and are going to be part of the package. So it's just essentially a tool belt issue.
A
I'll throw in there. One more question, then we'll go to the next clip. The labor issue seems to be noticed more and more. We had Adam Sullivan, the CEO of Core Scientific, tweeting about that this morning. He spoke about it in a private conference with TD Cohen the other day as well, talking about how Core Scientific and its five plus sites that they're building up for Core Weave are competing against Google and a lot of the other hyperscalers and new clouds out there for the big labor contracts. One thing he noted was that you are not only just competing for the big national brands, but you're competing on a price basis against people who have deeper pockets. And if you go cheap and hire someone local, you might not get the quality, you might be delayed, you might lose the contract. So there really is a fixed pool of talent here. How do you see that playing with the local game? Because if you're smaller, maybe you can get things done a little faster and manage it a little bit better, but maybe you also kind of get screwed by not having as good of quality laborers.
D
Yeah, I think at the scale that those guys are building out there, they're in competition, direct competition with the hyperscalers. I think for this size sites that we're dealing with, they're going to be more modular builds, potentially mobile builds. And the partners I think that even DMG talked about, you know, they've got essentially a co location partner that's coming with them. It's actually no different than what Marathon is doing with their partnership with Starwood in terms of like bringing them along with their expertise. So, you know, I, I think those issues won't be as plentiful on the smaller side of things.
A
Okay, Charlie, we stir up this next clip, which I think is pretty interesting. It's from I think a talk this morning. Ed Zitron, who runs a really well known blog and podcast and he has a contrary take on the whole AI Capex spend issue. Again, I think this was on Bloomberg's Business Week Daily as of this morning and it's eliciting a lot of attention. So we're zooming out a little bit more on Capex spend. Let's play this.
B
I'll probably let it run for about a minute because he, as he lands on the thesis here, of course their
G
growth is coming because people cannot measure how much an AI task actually costs. And a couple months ago Anthropic started charging their enterprise customers the actual token rates. What this has led to is suddenly businesses are going oh, how much money are we spending? Uber's. See, I think it was Uber's COO Andrew McDonald's said that they are having trouble justifying the AI spend based on the actual return that one can actually meas. So you've got a thing where you can't measure the costs and you can't measure the return on investment. What do you call that? You call it a thing without an roi.
H
Isn't it though safe to say, Ed, like I think about this, I like that there is going to be, when there's any new technology, there's a lot of money thrown at something, right? A hot new idea, whatever it is. And that ultimately, like we've talked with some experts in the AI world, they're saying all these large language models, not everything's going to exist because right now it doesn't cost you anything to use it. But at some point there will be a cost and people will start to select what they want to play with. And so is it a case of right now? I mean, at some point there will be some winners, some losers, and we'll see some things filter their way out and that there will be some return on investment for some of the larger players. When it comes to AI, do you not see some winners and losers in this or some winners in this?
G
I think the winner is Jensen Huang and the winner is the construction firms who have got prepaid for all the data center construction. Maybe Sam Altman and Dario Amadou have become billionaires through this. But when it comes to the actual businesses, you can't find anyone who can measure the ROI because you can't do it. So when it comes down to the model companies themselves, they're horrifyingly, horrifyingly unprofitable. I think OpenAI lost $20 something billion dollars last year. Anthropic's probably not far behind.
B
We don't have access to their books, of course.
G
Of course.
A
This is based on file for an ipo.
G
Yeah, and that's the thing. When we see these S ones, I think it's going to be kind of a massacre because I think that people have this view that these companies are becoming more profitable or even have a path to profitability.
A
Okay, Tom, Initial takes on, on that.
D
I mean, it's a good hot take. I think I kind of just, I kind of think of myself as like the angry old guy who was shaking my fist in the, in the air. Like, you know, like you and I talked a couple of weeks ago of seeing the utility of a lot of these AI products as just being like an extension of chat or search. And then there's been this explosion in the last three or four months around agentic use. And within that, things are happening very, very quickly. And I almost liken it to when, going back when Facebook announced their ipo. They had no profit. They're just basing their, you know, their numbers on how many users they had. And, and, and myself, I was like, what, you know, what kind of business is this? This is going to be a terrible stock. And now they're one of the most like, you know, obviously very successful, obviously became extremely profitable. So I think it's a little short sighted to, you know, to completely just throw the baby out with the bathwater. He kind of undercuts this idea that Anthropic is profitable and he puts it at the, at the feet of, you know, just pumping Elon. I mean, you know, at the end of the day, we'll see. I know that for, for my particular use and friends in my cohort, I know I'm within the circle. We use it all the time and it's become increasingly valuable. It makes my work more efficient, gives me superpowers in different ways. There's different types of people that are using it. Yeah, the enterprise guys at Uber and some of these other Fortune 500 companies didn't have, you know, throttles on their stuff and they, and people just went buck wild. Well, I use it very differently. Like I, I have a hundred dollar a month cloud account. I don't max out my stuff and I use it a lot. And so I think there's like, you know, different cohorts of people that are using it. I don't think it's slowing down. I think we're very, at the very, very early stages. The agentic stuff is not perfect. You got to spend time fine tuning it and doing all this other stuff. But the way that it's improving is going to dramatically shape, you know, the way people do things and it's going to disrupt a lot of industries.
B
Can I wrap with a total curveball question? So the SpaceX S1's out and surprise, SpaceX isn't a rocket company, it's a data center company, says Elon Musk. And he wants to put data centers in space. This is a bit of a fun thought experiment that we bitcoiners have had for many, many years. Tom, what's the feasibility of putting a data center in space?
A
Is it harder or easier than Tennessee?
B
Yeah, is it easier to put a data center in Tennessee or in space?
D
I mean, it took me an hour and a half to move my cows this morning. So I don't know if I'm exactly qualified to answer that question. I look like Jeremy Clarkson out there. I would say, I would say, like it's, Listen, all the smart people are saying you can do it, lasers and all kinds of crazy stuff. To me, I think there's probably a lot more cool things you can do here on Earth. Like I, I live in a part of the country where there's immense amount of like caverns and caves and you know, places where it's like very cool underground. We've, we've never even, you know, explored the depths of the ocean. So I think that'll be the hype is some of the space stuff that's going on. But I also think there's probably going to be a lot of innovation. If you look at the issues that people are having with data centers, I could see Some unique ways to go about it.
B
Thanks a ton. Data Centers in Space gets yes, maybe qualified answer. I love it. This is going to be a fun topic to keep hitting on.
D
Well, one thing I would say though about Elon shift into the data center business was he was very quick to pivot. He's able to use the infrastructure that he put in place and now has a really good end use customer that's going to drive a lot of revenue for them. And then Mark Zuckerberg recently kind of signaled the same thing that they would be potentially getting into whatever you want to call it, Neo cloud business where they're selling compute as well too. So there's something very special in the compute to token kind of like margin that a lot of these guys are seeing that maybe will be a bridge to when the agentic stuff catches up and business models are able to roi.
B
Love it. Tom, thank you so much for your insight and takes shout out to Sphere. It's had a great week. Thank you. Yeah, thank you so much. We'll catch you later. Gotta love Tom.
A
We got a few minutes. Want to jump over to the semianalysis tweet that I'll pull up your master of the screen here. So yeah, Cloudflare is now saying that for the first time in human history, which is not too long, the Internet is now mostly bots and not humans. So you know, Internet been around in some form or another since the 60s, so really not that long. And then truly we really only had it since the 90s, early 2000s, take off in the, in the 2000s. But I think it's interesting to see this kind of chart pop up here. Cloudflare obviously is, is the one to look at with this. They're going to have pretty good data on it, so wanted to pull this one up as we're waiting for Cole to join us to talk about bitcoin and bitcoin volatility, which obviously has been pretty brutal over the last month. I think we're down 20% month over month, which is not great. But Cole's a great person to kind of talk about this while we transition away from machines and bots and talk about our favorite coins. So feel free to take that one off. And I think Cole just joined.
B
Yeah, it is funny how we used to talk about tokens in crypto and now we're talking about tokens in AI. It's just tokens, different tokens all the way down. We're going to bring Cole on here in a second, but not before a word from our sponsor Lygos. Hedge funds are getting liquidated. Is your BTC safe? It's not just Bitcoin price drying up big whales, hedge funds and lending desks are going under. After the notorious 10, 10 and 25 liquidations. Counterparty risk is rampant. More important than ever to understand who actually controls your Bitcoin. Don't be the next FTX or Celsius victim. If you are working with another loan provider, do yourself a favor before it's too late and check out Lygos Finance block. Space is preferred. Non custodial Bitcoin lender using native Bitcoin smart contracts to protect your stack. With Lygos you always know where your Bitcoin is. Hold your keys. No wrapping, no bridging, no rehypothecation. Get competitive rates as low as 10% APR. I heard a rumor it could be lower than that. Go to Lygos Finance to learn more. All right, let's talk markets with our boy Cole Kennelly who's here waiting in the wings. I'm going to bring him up now. Cole, welcome to the show. Can you hear me?
E
Hey guys, great to be here. Thanks for having me.
C
Great.
B
Yeah. Welcome to the show. Good to have you back.
A
So cool. Bitcoin is down 20% month over month. Stretch had a bad day yesterday. Touched $94 MSTR. Bag holders are crying and everyone kind of wants sailors head at the moment. What's your take on bitcoin market? Is it really just not the hot shiny thing right now and the IPOs are drawing up the liquidity or is there something underneath the surface we don't know about?
E
Yeah, I think it's a confluence of a couple things. Most specifically I think saylor in the 8K selling $2.5 million of Bitcoin, which relative to how much bitcoin strategy owns is not a very large amount, but just kind of scares the market and makes the market think that he's going to sell more bitcoin. So effectively strategy has this stretch preferred and they pay out a dividend. They just bought back some debt. But he sold some bitcoin to prove to the market hey, bitcoin's liquid, it's money. But the market didn't like that. I think there's also a couple of other factors. Specifically some of these AI stocks, AI related IPOs coming up have shifted some capital and attention towards towards those markets. And so I would say that it's a confluence of a couple things. Who knows, perhaps the market's a bit concerned about Quantum as well. And so I think that it's a mix of sailor, these AI taking a little bit of the bid out of the market as well as some other factors. And so yeah, it's an interesting time in crypto and Vol kind of went to a nine month low, the B VIV index recently and then kind of mean reverted back to you know, 50s, 50 handle high 40s. And so it's been an interesting couple of weeks.
B
Yeah, it looks like BVIV rocketed up this week. What up 47%.
A
And can you explain the BVIV as well just for audience members who aren't familiar with it?
E
Yeah, sure. So the BVIV index is 30 day implied volatility of Bitcoin. It's pretty analogous to the Vix index but for crypto markets, for bitcoin. And so when the market is expecting uncertainty or volatility or risk, the BVIV index tends to increase. And so basically we use the global options market to price this index and it constantly, just prints every continuously. And so it's a measure of fear, it's a measure of uncertainty. At times it can measure greed, but it's really this expected risk index as you said.
B
I don't really believe bitcoin crashed because Michael Saylor sold $2.5 million worth of Bitcoin. It seems to me that it is part of this just AI sucking the money out of everything and the intention of everything. Do you have a similar view or maybe like qualifying why you think bitcoin and broader crypto experienced a massive drop this week?
E
I do think it's a mix of a couple factors. I mean the market definitely doesn't like that Saylor and strategy are levered and I think the sort of blow up risk or them failing is pretty low probability. But the market definitely doesn't like him setting the tone that he's going to be continuing to sell or that he needs to sell to pay the stretch dividend. I think there's something like six months of dividend sort of payments that he has on his balance sheet sort of earmarked for that. He had more but he had bought back the debt. And so even though it's a very small amount of bitcoin that he sold in nominal terms, I do think that the market doesn't like that he could sell a lot more to fund the stretch dividend. So I mean either he stops, you know, he lowers the stretch dividend and kind of, you know, that sort of ends or he sells bitcoin. There's not many Other avenues for, for him to sort of raise capital. I do think though that, you know, you have a SpaceX IPO, you have anthropic IPO, you have OpenAI IPO. The market is definitely focused on those things right now. I mean, I think, you know, there will be like a wealth effect. Who knows, people probably could, could end up buying bitcoin post, you know, sort of those things, you know, the dust settling. But maybe there's some other sort of market microstructure things happening with, you know, individual whales selling or like other things that are going on. But I would attribute it largely to the, the market being scared of strategy, which has so much bitcoin.
D
Right.
E
If there was ever a problem with strategy, they have, you know, $50 billion of Bitcoin. It would take a lot to sort of unwind that, that plus like the IPOs and there's just so many, you know, these different AI stocks that are, you know, in going up, you have Micron and Dell and the market's just, you know, a lot of these traders are very mercenary. They're looking for the next thing that's going up. They're following the trend. And so perhaps we're just seeing a small rotation or a rotation from, from crypto to some AI stocks. But I obviously think it will come back to crypto and you know, remain very bullish on crypto and bitcoin long term and think that, you know, this is kind of what a bottom looks like a lot of times.
A
To that end, I want to ask about sentiment. So we get a lot of our view into bitcoin price action and interest in it via Twitter, as do most people. You kind of swim with some institutions. Do you get the sense that they are not as interested in bitcoin at the moment, that it's maybe like yesteryear's thing and not as interesting to them for allocations. CoinShares obviously puts out a really good notice about once a week on institutional investment in bitcoin and crypto related products. It hasn't been as dramatically down as I would have thought given the price action. But I'm curious from your desk if you're seeing institutions kind of move one way or the other or is a little bit more muted than the retail fears on Twitter would have us think.
E
Yeah, I think that institutions largely are still really excited about bitcoin crypto tokenization, stablecoins. I mean, every day there's some different various announcements about a tokenization effort or a new stablecoin consortium or some new bitcoin related product or etf. There's so many ETF filings by all these institutions. And so I think that if you look at like the IBIT complex or the FBDC complex or some of these bigger issuers in the crypto space, asset managers, digital asset space, as they say, I think that there's a ton of appetite for this and they all think this is kind of where the market is moving and AI is the new sort of hot thing right now. But I think that crypto and stablecoins and Bitcoin have proven themselves as things that the market likes and that have a lot of utility and they're adopting. And so I think that all asset managers, issuers of ETFs, ETPs, ETNs, index companies, hedge funds, they're all looking at bitcoin, they're looking at crypto. And there's sort of this like, you know, difference of view, I would say, like from like crypto Twitter, you get a lot of people that are, you know, all in on bitcoin or some altcoin and they're, you know, candidly kind of, you know, their positions are down right now. And then you have the, you know, the people that are in the, you know, different institutions, they're thinking about how do I get involved in this space? And they're, you know, not as invested from a personal account point of view, most likely, and they don't see it the same way. And so I think that you get a lot of loud, upset people on Twitter for various reasons, but institutional companies and investors are still really excited about crypto. And I think that they see this kind of small correction or whatever you want to call it, as an opportunity. And so I think it's an exciting time and probably the most interest from institutions in crypto and bitcoin ever. Right. It's totally the opposite of crypto Twitter, which is just, you know, the sort of people that have insiders that have been in the industry for a long time that are upset, but I think that the institutions are super excited.
B
So BVIV is trading on in number of venues, but one of the venues that everybody's all hot about is hyper liquid. When I get your thoughts and takes on like this new type of 24 7, almost like gray market for, for, for assets. It's got the SpaceX Pre IPO.
A
It's a wall Street Journal. It's not a Wall Street Journal.
B
Yeah. Are you seeing the, the incident? Is it just the Wall Street Journal article or are the, the big boys in, in New York actually. Are they actually excited about something like Hyper Liquid?
E
I think Hyperli has captured the mind share of all of the crypto Twitter retail folks, but then also a lot of the institutions as well. If you look to this week, the CME stock, the NASDAQ stock and various others were sharply down on the news of perpetuals coming to the US market and this being effectively a threat to their futures business. And so I think that absolutely Hyper Liquid has caught the attention of a lot of the institutions for various reasons. They have these single stock futures effectively that are trading this perpetual wrapper and it's very innovative. It's 24,7 market. They have accessibility to commodities and equities and pre IPO companies like SpaceX. I think with the Cerebras IPO you saw that the market was looking at Hyper Liquid. There was a Twitter post from one of the folks in the Hyper Liquid ecosystem that showed Morgan Stanley, I believe, bankers looking at the Hyper Liquid chart for Cerebras on top of Bloomberg Terminal, which was kind of a poetic and symbolic in a way. But yeah, I think that Hyper Liquid absolutely is catching the attention of everybody in the traditional finance space, the crypto, retail obviously. And there's been a number of these ETFs that have launched recently of Bitwise and 21 shares and Grayscale which have all launched various hyper liquid ETFs and that coincided with a big run in the hype token along with the pre IPO stuff. And so Hyper Liquid is definitely something that everybody is paying attention to largely and is kind of this new on chain exchange conglomerate that there's a bunch of other great projects that are similar. You have lighter and several others. And so it's a really interesting space and I think that all of the incumbent institutions as well as all of the hedge funds and investment banks and other types of firms, asset managers, issuers are all paying attention to it. So that's something that's really kind of defied gravity. You have a Bitcoin, it's pretty crazy to see Bitcoin at 63K, 64K and hyper liquid is at all time highs at 73, 74, fully diluted a billion. And so hyperliquid's been incredible and I'm a big fan of Hyper Liquid. I think it's a really promising platform and look forward to BVIV being tradable there.
B
Cool. Cole Kennelly, Founder CEO of Olmex Labs thank you so much for coming on the show and ripping with us about markets. Will have you on again soon.
E
Thank you, guys. See ya.
F
Thanks, Bye.
A
Okay, Charlie, before we close out, I have one more thing. And that is Cash App has announced a brand new product. Can you guess what it is?
B
The wand.
A
Oh, you did hear it?
B
Yeah.
A
I was hoping you hadn't seen it because I was thinking you'd be like, oh, it's some AI power checkout process or.
B
I've already given, I've already given my take on it in. In a side chat, you know, right up, you know. Do you know what my take is?
A
I'd love to see it. Let's see if we can pull up the video.
B
Jack posted it. Let me.
A
It's so ridiculous. I already ordered one. Of course.
B
Let me pull up a Jack video.
A
But hysterical. I saw this and I thought, you know, there's SpaceX IPO, you're going through the prospectus and there's like these amazing images of rockets shooting off into space. And here we have Square is announcing the wand.
B
Yeah. Oh, it's called Pay my Magic.
D
Here we go.
A
Incredible. I will say they, they just let go of 4,000plus employees and this is the first thing I launch after a little bit salt in the wound.
B
So I mean, I will say, I mean, I have a pink Cash app card, so you kind of. You kind of already know they will
A
probably make a lot of money off this. Like it is. It's very focused on one particular sort of client in the Cash app ecosystem and it will do well.
B
It's not for the clients who are on Twitter. It's for the clients who are on Instagram threads by meta. It's for the clients who are on TikTok and it's for the clients who carry purses. It's not really for me, although, because I'm so contrarian, I just like the idea I might get one. Anyway, it makes a lot of sense. Cash app's becoming this whole Neo bank. I don't even know if that term really makes sense anymore. And NFC payments are everywhere. I was in New York with you a couple months ago and I was just unbelievably happy that I could pay with my phone on Everywhere. Mpl. Yeah, everything. It was amazing. So why do I even carry a card around anymore? If I can carry my phone, I might just carry my wand around. But I think this is an awesome product. 5050 on whether catches it catches on or not.
A
So funny. I'm just thinking about the timing where it's hysterical. Like Elon is announcing his $1.75 trillion space data center company. And Jack's like, how about a wand? How about a magic wand? They'll probably make a lot of money off. It's $25 a pop, and they're pushing it out. I'm sure it's going to go, like, semi viral on Instagram and they're going to probably net a lot of money, which shows you the power of little gimmicks like this.
B
It's not the margin on the wand, it's the margin on the new customer acquisition and increased customer use of the cash app platform. So that's where I think the opportunity lies. All right, Will, we're going to wrap it up. Jack, please come on the podcast. Let us know and talk to us.
A
You should have a magic bitcoin wand. Pay with SATs.
B
I know. Yeah. One that works just for cash app. Square terminals would be awesome. All right. Thank you for watching Block Space Live, brought to you by CleanSpark. We are live every weekday at 1pm Eastern except for tomorrow because we are traveling. And if you're listening on Coindesk, make sure to head to the Block Space feed. We are ending the Coindesk feed very soon. Remain, stay in continuity and go to the loyal listener. A loyal listener. Search blogspace on whatever platform you can figure out. You know our logo by now. Otherwise, cheers and see you all Monday.
Episode Title: SpaceX IPO, Ohio's data center woes, Sphere3D goes public, and Bitcoin Volatility
Hosts: Charlie Spears, Will
Air Date: June 4, 2026
In this ambitious episode of Blockspace, Charlie and Will guide listeners through the intersections of AI, Bitcoin, and the rapidly transforming data center landscape. The highlights include the groundbreaking SpaceX IPO (and why it’s being called a “data center company in a rocket costume”), Ohio’s complex relationship with data centers, Sphere 3D’s public listing, and a deep dive into recent wild Bitcoin market volatility. Interviews with Andrew Burchwell (Ohio Blockchain Council), Tom Masiero (Sphere 3D), and Cole Kennelly (Olmex Labs) deliver hands-on industry perspectives.
SpaceX Files for IPO
Data Center Pivot
Elon Musk's Vision
Will:
“We're not going to be the best data center company. We are going to make every single data center company obsolete by launching data centers into space... having essentially no cost for running them from the energy standpoint." ([05:20])
Charlie:
“At $1.75 trillion, SpaceX will be larger than Microsoft… behind only Apple and Nvidia. And that's despite posting a $4.28 billion net loss in Q1 alone." ([03:22])
Will reflecting Musk's priorities:
“Maybe the reason to go to space is not rather an engineering one, but perhaps a regulatory [one]… you don’t have the NIMBY problem in space.” ([08:32])
Public Pushback
Policymakers' Dilemma
Jobs vs. Control
Toward a Middle Way
Andrew Burchwell:
“People are noticing that their lives are out of their control. …When people look at big tech and surveillance and censorship… they rightfully say, I'm not sure I want to buy into that completely.” ([16:15])
“The disconnect to me is less that people are resistant to the tools. It's just that I don't think we're actually doing a very good job of saying, here's how these tools actually will help you.” ([16:15])
On utility blame-shifting:
“Utilities have done a really great job of saying the data centers are the reason why our grid is fragile and broken… but it's 50 years of perverse incentives and malinvestment...” ([18:37])
Sphere 3D Merger & Market Reception
Scaling Philosophy: Hyperscale vs. Modular
Labor as Critical Bottleneck
AI Capex and Profitability Skepticism
Tom Masiero:
“I kind of think of myself as like the angry old guy shaking my fist in the air... I see the utility of a lot of these AI products as just an extension of chat or search. …The agentic stuff is not perfect... but the way that it's improving is going to dramatically shape the way people do things and it's going to disrupt a lot of industries.” ([34:50])
On data centers in space:
“To me, I think there's probably a lot more cool things you can do here on Earth… unique ways to go about it.” ([37:37])
Bitcoin Dip Analysis
Institutional Attitudes
Hyperliquid: 24/7 Perp Markets
Cole Kennelly:
“You have a SpaceX IPO, you have anthropic IPO, you have OpenAI IPO. The market is definitely focused on those things right now… [traders are] looking for the next thing that's going up.” ([47:01])
“Institutional companies and investors are still really excited about crypto. …this is kind of what a bottom looks like a lot of times.” ([48:27])
| Segment | Timestamp | |------------------------------------------------------- |------------ | | SpaceX IPO, data center focus | [03:22] | | SpaceX/Anthropic, Colossus deal impact | [06:43] | | Data centers in space: engineering vs. regulatory | [08:32] | | Ohio data center politics (Andrew Burchwell) | [10:57] | | Community skepticism, extractive industry concerns | [16:15] | | Sphere3D & Cathedra merger (Tom Masiero) | [24:13] | | Modular vs. hyperscale data centers, labor challenges | [27:03] | | AI Capex/ROI critique, industry comparisons | [32:37] | | Bitcoin market, volatility & institutional flows (Cole Kennelly) | [42:13] | | Hyperliquid & perpetual markets | [51:23] | | Cash App “Magic Wand” launch – culture wars | [54:12] |
This episode will get you up to speed on the latest in Bitcoin, AI-fueled supercomputing, hyperscale IPO speculation, community tensions over digital infrastructure, and why the shape of tomorrow’s technology may depend as much on public perception and politics as on price or compute power.
Listen to Blockspace for rich, opinionated, and insight-packed coverage at the intersection of AI, computation, and Bitcoin culture.