Hunt, Mike, and Jason walk the Cash Flow Memo through an oil tape driven by Hormuz headlines, a power grid that has started saying no to data centers, and the valuation question underneath the Tesla-SpaceX merger.

The Cashflow Memo

Key Takeaways

* Oil is trading the Hormuz headline, not the fundamentals: Saudi Aramco earned $33B in Q2 because price more than offset shipped volume, and its CEO says ~2 mmbbl/d of Saudi supply covers customers with or without the Strait open. Hunt’s pattern holds (roughly $90 on missile strikes, high-$70s to $80 when calm, ~$20 of backwardation to the 12-month strip at ~$70-72), and he reads the market as pricing this better than the commentators do.

* Natural gas is holding $3.50 on LNG alone (13 Bcf/d in 2024, 16 in 2025, 18+ this year, 20 next) with gas-for-power flat since 2025; the swing factor is data centers forcing on-site turbines, which would restore ~1.5 Bcf/d/yr of power demand and firm gas toward $4. Supply growth is 10 of the last 15 Bcf/d from Permian associated gas, so incremental supply keys off the oil price, not the gas price.

* Siting, not chips, is now the binding constraint on the buildout: New York has a one-year hold, Virginia is saturated (Google will not propose more), and the Texas governor just ordered audits (effectively ~12 months) of 900 GW of proposals against ~90 GW of installed state capacity. Combined cycle cannot be built fast enough and turbines are sold out, so on-site generation is the only path.

* SpaceX is the episode’s central valuation debate: hosts expect Tesla merged into SpaceX on a trailing-45-day price basis after the China operations are spun out, and treat the equity as a data center business that buys land-free siting. Jason underwrites just south of $90 (~8 GW next year at ~$35B/GW, 20 GW target, 15% IRR), Hunt anchors $50 at roughly half the current price, and Mike flags lockup expiries and launch or regulatory stumbles as the cheaper entry. Launch economics gate the space leg: $1,000/kg makes a gigawatt cost $31B to loft, $150/kg makes it $4.7B, and Starship has flown four times.

* Healthcare AI expands capability rather than cutting cost, with one exception. Lilly’s Isomorphic Labs partnership is about a year old with nothing to show yet, and scientists at Lilly, Regeneron, and Pfizer will assault IT budgets for tokens rather than save money. UnitedHealth is the real cost-out: $1.5B of IT spend, one-third to make Optum Insight AI-first and two-thirds to insurance systems, with a pre-auth pilot cutting missing-information denials 68% and appeals nearly 90%. Energy IT departments (Exxon, midstream, EOG) get genuine savings, and the token spend routes through Amazon, Microsoft, and Google because no one gets fired for running a Chinese open-weight model on a hyperscaler.

Show Notes

[00:00] Intro & Cash Flow Memo Download the memo at telltales.us; 30 minutes on energy, technology, and healthcare cash flows.

[00:27] Iran, Hormuz, and $90 Oil Saudi Aramco earned $33B in Q2 as price offset lost volume, and management says ~2 mmbbl/d covers customers either way. Oil runs to roughly $90 on strikes and back to the high-$70s when things calm, with ~$20 of backwardation to the 12-month strip.

[03:19] Exhibit B: Gas, LNG, and Permian Supply Gas holds $3.50 on LNG growth from 13 Bcf/d in 2024 to 20 next year, while gas-for-power has been flat since 2025. Ten of the last 15 Bcf/d of supply growth is Permian associated gas, so supply follows the oil price.

[05:01] The Grid Says No: New York, Texas, Virginia New York’s one-year hold, Virginia’s saturation, and the Texas governor’s audit letter against 900 GW of proposals versus ~90 GW of state capacity. Combined cycle is too slow and turbines are sold out, so on-site generation wins.

[10:40] Tesla into SpaceX: What Is It Worth The hosts expect a trailing-45-day merger after a China spin-out, then split on price: Jason just south of $90 on 8 GW next year at ~$35B/GW and a 15% IRR, Hunt at $50, Mike waiting on lockups and launch risk. Launch cost decides the space leg at $31B versus $4.7B per gigawatt.

[18:18] AI in Healthcare: Harrow, Lilly, UnitedHealth Harrow is a commercialization business where AI is not decisive. Lilly’s Isomorphic Labs tie-up is a year old with no results yet. UnitedHealth is spending $1.5B, with a pre-auth pilot cutting missing-information denials 68% and appeals nearly 90%.

[22:53] Token Budgets at Pfizer and Regeneron Scientists will consume the IT budget rather than shrink it. Expect more candidates and fewer late failures, not cost savings.

[24:20] Energy IT: Exxon, Midstream, EOG Upstream and midstream have run machine learning for years and get real cost savings here. EOG’s decade-old well-file system is the template.

[26:12] Open Weights and Why the Hyperscalers Win Open-weight models cut token cost, but IT departments would rather buy from Amazon, Microsoft, and Google than defend a Chinese model to their board. That routes the savings through the hyperscalers.

[28:06] Apple’s Siri Problem Apple still has no AI-enabled phone and a software team behind the eight ball. Ecosystem lock-in buys time; it does not buy stagnation.

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Cashtags

$AAPL $AMZN $EOG $GOOGL $HROW $ILMN $KMI $LLY $MSFT $PFE $REGN $SPCX $TSLA $UNH $XOM

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