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Gavin Baker says a startup renting several thousand Blackwell GPUs paid ~mid-$2…

2026-08-04 · 15:25 UTC ·@patrick_oshag ·1 min read

Brief

Gavin Baker argues rising GPU costs are forcing hyperscalers to under-earn: customers renting thousands of Blackwell GPUs saw prices jump from mid-$2 to just under $4/GPU-hour (~50–60% in 6–7 months), with Baseten expecting a 100% renewal hike. Baker and Patrick O’Shaughnessy explore financing risks, Nvidia’s playbook, memory supply, and SpaceX’s data-center/ orbital compute ambitions amid robust on‑the‑ground demand.

Why it matters

Gavin Baker says a startup renting several thousand Blackwell GPUs paid ~mid-$2 per GPU-hour and faces paying just under $4 per GPU-hour seven months later — a 50–60% increase in 6–7 months.

Key details

  • Baseten publicly indicated it plans to pay 100% more for Blackwells at contract renewal, and Baker concludes that these cost jumps mean hyperscalers are currently under-earning.
  • Patrick O'Shaughnessy and Baker note that despite a weak month for public AI stocks, on-the-ground demand in Silicon Valley shows no slowdown; they discuss financing the buildout (cash flow vs. debt), Nvidia's strategy, memory supply constraints, and SpaceX as a compute player.
Source evidence

Gavin on why the hyperscalers are under-earning:

" I literally spoke to a company this morning who rented a cluster of several thousand Blackwells at somewhere in the mid $2 per GPU hour,  and this is one of the sexiest startups that people want to be in business with.

They're renting the exact same cluster, and they're hoping 7 months later to pay just under $4.

That's pretty crazy because a really gentle decline in prices would be bullish. Instead, we're up, depending on the starting point, 50 to 60% in six or seven months.

And there have been so many anecdotes like that. One of the inference clouds, I think it was Baseten, they went on a podcast and essentially said, "We are planning to pay 100% more for Blackwells when our contract expires.

And that just means that essentially all the hyperscalers are under-earning.

My main mission out here this week is: tell me something negative."

Video

Patrick OShaughnessy (@patrick_oshag)

My seventh conversation with @GavinSBaker.

It's about the gap between what the market is doing and what companies are seeing. It's been a tough month or so for public AI names, but there's no sign of a slowdown on the ground in Silicon Valley.

We discuss:
- Why old GPUs are getting more expensive
- Open source vs the frontier
- Claude as Wall Street's Walter Cronkite
- Whether the buildout gets funded out of cash flow or debt
- SpaceX as a data center company
- And more

Enjoy!

TIMESTAMPS
0:00 Intro
1:17 AI Selloff vs. Fundamentals
10:20 Financing the AI Buildout
18:18 GPU Prices Keep Rising
24:23 Claude Moves Markets
29:01 What Could Break the Thesis
36:59 The Memory Supply War
42:08 Nvidia’s New Playbook
50:14 China and Open Source
61:51 Data Centers and Regulation
71:11 SpaceX and Orbital Compute

Video

— https://nitter.net/patrick_oshag/status/2084610308279288141#m