Friday Charts: The Photon Economy – Lighting Up the Future of Tech
The Photon Economy isn't just glowing—it's blinding. From quantum computing to Li-Fi networks, light-speed innovation is rewriting the rules. Here's why your portfolio should care.
Beam Me Up, Wall Street: Traditional finance moves at dial-up speeds compared to photonic transactions. Banks still use fiber optics like it's 1995—meanwhile, startups are encoding data in light pulses that could make Nasdaq's infrastructure look like a candlelit ledger.
The Dark Side of Bright Tech: For every breakthrough in solar cell efficiency, there's a VC firm turning it into a speculative asset class. Photonics ETFs now trade at 30x earnings—because apparently light-based revenue streams are immune to gravity.
The future's so bright? Maybe. But someone's definitely selling opaque investment vehicles to capitalize on it.
US electricity generation has stagnated over the past 15 years, with gains in natural gas (in blue) and renewables (green) only offsetting the decline in coal (brown).
Paying in cash — so far:
The five big hyperscalers have so far funded their AI capex boom with cash, but that is starting to change: Meta, Google and Oracle have collectively borrowed nearly $100 billion from the bond market over the past eight days.
Tapping the brakes?
Torsten Slok notes that investment in data centers is still growing (rapidly), it’s growing at a slower rate. My guess is they can’t build the power generation fast enough to keep up. (There WOULD be no such issue in space.)
Rate cuts incoming?
Polymarket betting suggests there’s an 80% chance the president’s IEEPA tariffs will be deemed unconstitutional. If the tariffs are revoked, inflation would presumably fall, giving the Fed room to cut interest rates. Tariff payers might even get the $90 billion they paid refunded. What happens if we get rate cuts, bigger deficits and an AI capex boom? The bubble might only just be getting started.
Job cuts:
Younger workers could use some help from the Fed. The last time the BLS collected data (way back in August) the unemployment rate for 20-24 year-olds had risen to 9.2%.
Not AI’s fault?
AI typically gets the blame for companies hiring fewer recent graduates, but layoffs in the most directly impacted industry are expected to be lower this year than last.
Bubble watch:
Nvidia is calculated to have a higher weighting in Morgan Stanley’s benchmarked world index than the entire country of Japan.
The scariest chart?
The FT that the West is losing its “culture of progress,” with worrying implications for public policy: The 2025 Nobel Prize for Economics was awarded to three economists whose work suggests that believing in progress is essential to making it.
Rookie numbers?
Tomasz Tunguz notes that AI infrastructure is only the sixth-biggest infrastructure project in US history (if wars count).
For the sake of progress, let’s hope it gets much bigger.
Have a great weekend, space-based readers.
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