Invest Like the Best with Patrick O'Shaughnessy · Tuesday, August 4, 2026
Gavin Baker explains that the market's negative reaction to compute pricing changes might be a misinterpretation. He notes that while contracted compute is at a discount, as contracts roll off and are repriced higher, it will lead to acceleration in the AI sector.
“And so essentially, you have the contracted base of installed compute trading at a massive discount to the current spot market.”
“And as those contracts roll off and compute is repriced higher, and compute will still get repriced higher, and spot can decline and compute will still get repriced higher.”
“I think you're going to see a lot of acceleration that's going to answer these ROI questions.”