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This whole private credit thing… it’s not getting the attention it deserves. Everyone’s fixated on the AI hype, which, let’s be honest, feels like a very expensive magic trick. But underneath that, this quiet panic is building in a corner of the market most people don’t even know exists. It’s the kind of thing that doesn’t make headlines until it’s actively ruining your day. These firms are basically lending money to companies that are already a little… precarious. Lots of software companies, apparently. Which, given the current obsession with algorithms, feels a bit like lending money to a robot with a gambling problem.

Nebius, at its heart, is a purveyor of artificial intelligence – a cloud computing enterprise, if one insists on the prosaic. It constructs digital sanctuaries – data centers – and leases space to others, offering computational power to both ambitious corporations and solitary innovators. It is, admittedly, curious to observe entities like Meta Platforms erecting their own digital fortresses to utilize Nebius’s services. However, it speaks to a desire for an asset-light existence, even if it incurs a slight premium. A touch extravagant, perhaps, but undeniably modern.

ASML manufactures the lithography machines essential for producing advanced chips. Broadcom designs the networking silicon and accelerators that allow data centers to process the resulting flood of data. Both are currently enjoying considerable success. However, when one considers not merely their performance, but the price one pays for a share in that performance, a divergence emerges.

For years, this company, renowned for imbuing mortals with the illusion of speed and grace, has been beset by rivals, nimble newcomers eager to claim a share of the field. Add to this the general discontent of the populace, a reluctance to lavish funds upon mere comfort when necessities press, and the stage is set for a drama of no small consequence.

The recent exchanges – acts of calculated disruption against vital energy infrastructure – have, predictably, instigated another surge in the price of black gold. As of the twentieth of March, Brent crude commanded a price exceeding one hundred and five dollars the barrel – a fifty percent ascension from the level prevailing before the outbreak of conflict. It is a price not merely of supply and demand, but of anxiety and the ever-present specter of instability.

Now, Tesla makes cars. Electric ones. And xAI makes… well, they make promises about artificial intelligence. A crowded field, that. Like a highway during rush hour, only with more venture capital. It’s all very modern. And probably won’t solve any real problems. But who’s counting?

The latest wrinkle involves the U.S. Justice Department accusing three Supermicro employees – including one of the founders, a gentleman who clearly enjoys a good puzzle – of violating the Export Control Reform Act. Apparently, around $2.5 billion worth of servers, lovingly packed with Nvidia graphics processing units (GPUs), were surreptitiously shipped to China. Now, one understands the need for rules, of course. National security and all that. But one can’t help but picture a clandestine operation involving carrier pigeons, smoke signals, and a rather disgruntled customs official.¹

Already, Nebius stock has enjoyed a 47% ascent this year, a trajectory that suggests either remarkable ingenuity or an exceptional talent for catching the prevailing wind. And it appears this particular breeze may persist. Let us examine, shall we, the reasons why this latest arrangement with Meta could propel this artificial intelligence infrastructure provider to heights previously reserved for hot air balloons and overly optimistic venture capitalists.