Funds on Fire

NVIDIA's $81.6B Quarter + Anthropic Just Passed OpenAI, The Pope and more | Ep. 31

Devin Robinson

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Nvidia prints an almost unbelievable quarter, Anthropic leapfrogs OpenAI on valuation while sprinting toward IPO mode, and model performance gaps start to look like real operational risk. Put those together and you get a new reality for fund managers: AI is not just a tech story, it’s a capital markets story, a fundraising story, and an operating system story. If we can’t clearly explain what sustained AI infrastructure capex means for our strategy, we’re pitching uphill before the meeting even starts. 

We break down why Nvidia’s data center dominance and sovereign AI demand point to a multi-year buildout, then translate that into a simple pitch-deck upgrade you can make this week. Next, we tackle the LP question that’s about to show up everywhere: “Should I put my money into the next AI IPO instead?” We lay out a clean way to position cash flow, liquidity, and correlation using an “AI alternative” slide so we address the comparison before we get boxed in by it. 

From there, we get practical about AI vendor lock-in. Benchmarks like agentic coding aren’t internet drama if your investor outreach, compliance, underwriting, and reporting will run on these tools for the next five years. We also pivot to the macro backdrop: Kevin Warsh’s reform language at the Fed, the risk of a higher-rate regime, and why assuming rate cuts could age badly fast. Finally, we dig into commercial real estate distress as banks start dumping loans at steep discounts, and we share a simple buy-box and outreach playbook to get in position for the next 60 to 90 days. 

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The Week That Broke The Scale

81.6 billion dollars in one quarter. Nvidia just made more profit in 90 days than Intel made in total revenue all of last year. And Anthropic, they just closed a $30 billion round at $900 billion, which passes OpenAI for the first time in history. Claude Opus 4.8 just dropped on Thursday, beat GPT 5.5 on agentic coding. And then from the Fed side, Walsh got sworn in as the Fed chair and said 11 words Wall Street was it ready for. And banks finally started dumping commercial real estate debt at 85% off, which is crazy. All of that in one week. Let's dive

Show Setup And Sponsor Tooling

in. Welcome to Funds on Fire, the podcast that ignites the passion of investment funds and capital raising. Here we turn the complexities of fund management into clear, actionable steps that drive results. I've invested into diverse real estate across the United States and manage thriving funds. And I'm committed to transforming lives through the vehicle of investment funds and helping others to do the same. Join me as we document the journey of scaling businesses, raising capital, and impacting tens of thousands of people around the world. My name is Devin Robinson and welcome to Funds on Fire. Now, this episode is brought to you guys by Funflow OS, the autonomous operating system for finding, nurturing, and closing capital for your for you as a real estate operator. Flow AI is the employee that you can't afford just yet. And it runs your investor outreach from drafting your follow-ups in your voice, tracking your 506B relationships for compliance. And it does all of that on a multi-model AI stack, which matters more than ever this year because the AI vendor wars are getting pretty spicy. You don't know what to lock into when it comes to your roadmap. So make sure you guys check it out. It's free if you are just a flipper builder wanting to manage your investors and loans. But if you are a fund manager looking to scale up, use the code FIRE for 50% off your first three months. Again, fire, just go to fundflowos.com. Let's dive in.

Nvidia Signals AI Capex Boom

Now, story number one the biggest quarter in the history of technology, and it's not even an exaggeration. NVIDIA reported in Q1 $81.6 billion dollars in revenue, 85% year over year growth, which is crazy. And get this they beat the Wall Street estimate of $79.2 billion by over $2 billion. And the stock dropped 1.3% in the after hours. Like read that again. Beat by over $1 billion, stock dropped 1.3%. That's what happens when a number that should be shocking becomes the new normal. Wall Street has officially priced in the AI build out, but the headline number, the one that matters for fund operators, is the bottom line. Net income, $58.3 billion in one quarter. 58.3 Intel's total revenue for all of 2025 was 54.2 billion. Nvidia's profit for one quarter is 58.3 billion. They made more in three months in pure margin than Intel made in 12 months selling stuff. Congratulations, Intel. Just genius work the last five years, right? The data center segment alone, the part that sells AI training and inference chips, did $75.2 billion, up 92% year over year. This is the segment that powers every anthropic open AI, Meta, Microsoft, Google AI model, and specifically in America, and the forward guide 91 billion the next quarter. They're telling Wall Street that the build out is accelerating, not plateauing, not going down. It's only getting more. That is countries buying compute, buying their own national AI infrastructure. Sovereign AI crossed $30 billion in fiscal 2026. That is three times the prior year. About 14% of Nvidia's total revenue is now governments buying chips for national scale AI. So kind of the default take that you've seen all over finance Twitter is going to be the standard AI is in a bubble. Every value investor is going to dust off their 2,000 cap rate spreadsheets and tell you that NVIDIA is overvalued. Like, I don't think that's right. I actually don't think that AI is the bubble. I think maybe like LLMs are the bubble, right? There's like all these different and really only three or four models are going to make it out of this. But AI, LLMs is only one part. That's only one part of the AI ecosystem. And here's what I think that people are missing. The bubble framing assumes CapEx outruns revenue, but the hyperscalers, Microsoft, Google, Meta, Amazon, all guided their 2026 combined capex above 700 billion. 75% of that is AI infrastructure. Wall Street is now forecasting 2027 total big tech's CapEx to be over over $1 trillion. A trillion dollars in 2027 with a T, that's not a bubble. That's a sustained multi-year arms race for this AI dominance. And NVIDIA is the toll road every single hyperscaler has to drive on. So they're making money from everybody. And if your fund's my macro thesis doesn't have a coherent answer to what does sustained trillion dollars per year AI capex mean for our strategy, then you're kind of pitching uphill. You need to kind of pick it up and figure out what that mo what you're going, how you're going to hedge that. Now here's what to do this week. One thing, open your pitch deck, find the macro slide, add a bullet, and all it says is AI infrastructure capex is structurally above $700 billion in 2026 and projected to be above a trillion in 2027. We are positioned for a world that CapEx is the dominant macro variable. Because at the end of the day, that's what's going to matter going into this AI war. Then explain in a couple bullet points why your strategy benefits from this. And if you can't, then that's information too. You need to do research. You need to kind of evolve your strategy.

Anthropic Overtakes OpenAI In Value

Story number two Anthropic just passed OpenAI. And as of this week, Anthropic is hours away from closing a $30 billion fundraise round at $900 billion valuation, and probably more than that. For the first time in this whole AI right race, Anthropic is now valued higher than OpenAI. Who remember we like we use Chat GPT as a verb? And now they anthropic is surpassing them. And it's not just the valuation, the revenue number is what should make every fund operator stop scrolling. Because what's wild is Anthropic was profitable. I don't even know how that's possible. Annualized revenue at Anthropic in February of this year was $14 billion. By April, 12 weeks later, $30 billion. They doubled in 12 weeks, doubled in 12 weeks. That's not a typo. That's the fastest pre-IPO revenue ramp in modern tech history outside of SpaceX. And SpaceX took 30 years to get there. Anthropic did it in five years, and Anthropic actually literally today just filed their IPO. Meanwhile, OpenAI is now prepping for its IPO filing, and the IPO race between the two of them is going to define the second half of 2026 and what that looks like. So here's why this matters for you. If you're raising capital right now, then you have a new competitor for every LP dollar. The pre-IPO secondary market for anthropic shares as at a $900 billion mark is already really active. Wealth advisors at the major shops are pitching it as a buy the inevitable IPO play. That's the direct competition for the same capital that would go into your fund. Every wealth advisor with a Bloomberg terminal just got a new pitch script and your LP read it before they read yours. And so here's what you want to do this week. Add a slide to your pitch deck called the AI alternative. Address it head on. Three bullets. Bullet one, AI exposure exposure is concentrated. Our fund is uncorrelated to chip cycles, GPU prices, and model release cadences. Bullet two, AI returns require an IPO event to monetize. Our fund generates cash flow within the first 18 months, 16 months, year, whatever. Bullet point three, anthropic secondary at a $900 billion mark is illiquid private equity. Show your own liquidity profile in comparison. Get ahead of the questions before the LPs ask it because they're going to ask it. Every meeting starting now, they're going to ask what your AI strategy is. They're going to ask if they should invest into AI. Story number three the AI vendor lock-in

Claude Benchmarks And Vendor Lock In

story. It just got measurable. And what I mean by that is on Thursday, May 28th, which is last week, Anthropic released Claude Opus 4.8, which I've used and I did a video about. And it doesn't just beat the prior models, it kind of beats the entire field in most of the benchmarks. SWE bench Sui Bench Pro Sui Bench Pro, that's the benchmark that measures agentic coding ability, the kind of AI that automates real workflows, the kind that your fund will eventually run on as it should. Claude Opus 4.8 scored 69.2%. Whereas GPT 5.5, which is the only model close in this in this era area, in the whole agentic modeling area, scored 58.6%. Gemini 3.1 Pro scored 54.2%. I mean, that's a 10-point gap on the most important AI benchmark for fun operator automation. And it gets worse for the competition. Opus 4.8 has a new fast mode that is three times more cost effective than Opus 4.7 and 2.5 times faster on response. 3x cheaper, 2.5 times faster. That's like the migration argument written by Anthropic for you. Three times cheaper, two times faster. Now, in fairness, GPT 5.5 did win one benchmark, which is Terminal Bench 2.1, the agentic terminal coding, 78.2%. So OpenAI is not dead. They're just losing on the benchmark that matters most for the workflows that fund operators and we actually build on. The default take for most people is going to be hey, benchmarks don't really matter. Some will say that they're gamed, some will say that, hey, let's just wait to the next model release. It's going to be fine. But I don't think that's the right response. I think the right response is every fund operator is choosing a vendor right now for the AI tools they will run for the next five years. That choice kind of is a lock-in, and the AI you build your firm on this year is going to be married to the vendor's API roadmap for the rest of the decade. And if you bet on the loser, then you have to replatform in 2027 while your competitors are scaling up. So this is exactly why we built our fractional chief AI officer for the this program that we built, we plug it into your fund as an AI strategist, we pick the stack, we build the workflows, we replace the $60,000 to $150,000 hires most operators can't afford for this role. And if you're looking at the AI noise right now and don't know where to start, then that's the exact reason why our fractional chief AI officer program exists. Because I think the number is like 77% of enterprise companies are either hiring for or have a chief AI officer. And so this is really important. If you're interested in that, you could reach out to us with the link below. Now, OpenAI is preparing an IPO filing while Anthropic is releasing better, faster, cheaper models, and then now just filing their own IPO. And so here's what to do this week: audit your firm's AI stack. Open a doc, list every AI tool that you pay for, everyone, the transcription tools, the CRM AI, the follow-up writer, your document intelligence, all of it. And for each tool, write down the underlying model anthropic, open AI, both proprietary, open source. What is it? Then ask, am I diversified? Am I committed? Or am I just kind of floating around between models? And floating is the wrong answer. Pick a side and build for both. Now, those are three AI stories: the capital, the valuation, the capability, all accelerating at the same time.

Warsh Signals Fed Regime Shift

Now let me bring it back to the real estate and the real world economy because while AI is sucking up all the oxygen, the Fed and commercial real estate are about to collide together. So that leads me into this very fourth story here, which is Kevin Walsh was sworn in last week as the 17th chair in the Federal Reserve. We talked about that a couple episodes ago. And he gave Wall Street 11 words it wasn't ready for. He says this I quote, to fulfill this mission, I will lead a reform-oriented Federal Reserve. End quote. 11 words. That sounds like a normal swearing in line, but it's not because Warsh's idea of reform is to sell most of the Fed's balance sheet and return the central bank to a passive observer, not an active market participant. Translation, the Fed put the thing every fund manager has implicitly priced into every model for the last 15 years, Warsh wants to take it off the table. And his definition of inflation is price stability should be a change in prices such that no one's talking about it. Nobody's talking about it. That's his bar right now. Every podcast, every newsletter, every dinner conversation is talking about inflation. So by his own definition, his job is not done, not even close. And that is the most hawkish framing Wall Street has heard since Volcker, right? So now his first FOMC meeting is June 16th and 17. And that is 17 days from when this episode drops, 16, 17 days. And here is the part that that's not getting enough air time. And at this, at his swearing in, Donald Trump turned to Warsh on camera and said, Don't look at me, don't look at anybody. What does that even mean? Here's what I think. Trump knows the autonomy fight is coming and he is publicly positioning for a plausible deniability factor. Trump wants rate cuts, Walsh wants balance sheet shrinkage. They're going to clash in public within 90 days. Like mark down. I think it's going to happen because you've got, you know, those three dissenting voters in the Fed that want to raise red rates. Bloomberg just this week is now showing market bets on 2026 rake hikes, not rate cuts, hikes. And per the Bank of America Fund Manager survey, 62% of global fund managers expect the 30-year treasury yield to hit 6% by the end of the year. 6% on the 30 year? That would be the highest level since 1999. That is the macro regime your pitch deck has to start assuming. And really, like you have to play into that. The default take that people are taking right now, which I think are completely wrong, and we talked about it a couple weeks ago, is oh, let's wait to see what Warsh actually does on June 17th. Then we're going to react. I think that's wrong. I think the reframing has to happen before the meeting, not after, because the second Warsha's statement comes out, every allocator with a brain is going to reread every pitch deck on their desk. And the desk that already led with this new framing is the one that's going to read the smartest. Look at your deck right now, today. Is the word cut in your macro slide? If yes, like you probably want to rewrite it before June 16th, because I don't think we're going to cut rates, and neither do most people. I did see a post by Pace Morby that said it, but it was funny because like people who actually knew what they were talking about were like roasting him in the comments because they're like, there's no way we're cutting rates. Every operator who built their 2026 deck around rate cuts is currently doing kind of like the slow motion of no realization. And you guys know who you are. Like, we need to catch up on this. And here's what to do this week. This is the macro slide rewrite that you need to do. Open your pitch deck, find the macro slide, replace the headline with this. We are positioning for a macro regime where the Fed treats inflation as a policy policies choice, not a data outcome. And where Fed independence will be tested publicly in the next 90 days. Now, then in two or three bullet points, explain what your strategy does in that regime because maybe for the short duration, maybe you benefit from the higher cap rates, maybe your debt is long and fixed. Whatever it is, write it explicitly. Write it 17 days, 16 days. That's all you have. Use it. Now, story number five.

Banks Dump CRE Debt At Discounts

The supply side of the commercial real estate distress story just kind of unlocked. There's going to be a lot more supply. And Bloomberg dropped a piece on May 15th that said, Extend and pretend era ends as real estate lenders take losses. After three years of pretending the office market would recover, banks are finally cutting their losses. Goldman Sachs, Deutsche Bank, regional banks across the story, the country all dumping non-performing commercial real estate loans at discounts up to 85%. Let me give you two specific deals so this isn't just some abstract thing I'm making up. Deal one Shanghai Commercial Bank in New York City. They sold a loan tied to a stalled condo conversion project at 335 West 35th Street. The sale price, an estimated 85% discount to the loan's payoff amount. What? That's insane. Deal two, investors held a $240 million commercial mortgage-backed security. The underlying loan sold, the bond, the bondholders got $101 million. That's 58% loss to investors on bonds that were rated investment grade three years ago. And here's the wall behind it: $663 billion of commercial real estate loans mature in 2026. Banks hold 46% of that. That is what banks' capitulation looks like. Every regional bank CEO who told their board, hey, we're going to extend and recover for the last three years, and it's having a really rough Monday meeting today. And last week we covered the Denver Energy Center going from 76 million to 5.3 million, 97% off. That was the buyer side of the story. Distressed buyers scoop deals at insane bases right now. This week is the seller side. Banks finally letting go. That means the deal flow is about to explode. The next six to 12 months are going to be the best discount opportunity in commercial real estate since heck, probably like the great financial crash. And right now, like I'm not really pitching anything. Stay away. I don't, I don't know. Office at this basis is the deal of the decade for operators who know how to underwrite conversion. The math has to actually work and you have to know what you're talking about. So here's what to do this week. There's two parts to it. Part one, build a distressed CRE, right? Commercial real estate buy box, one pager, target the metros that you think there are good areas in, target discount thresholds, target asset types, target hold periods. Keep it on one page. Part two, send your top 20 LP relationships this exact two-line note like this. Banks are now dumping commercial real estate loans at 85% discount. I'm building a buy box for the next 60 to 90 days. Want to send me, want me to send you the first deal when I lock it in? That's the whole note. No deck, no pressure, just smart positioning and an open door to some people who you think would actually be interested in it. Out of the 20 LPs, maybe three to five will actually reply within the next 48 hours. One or two will actually like book that time with you. That's your go time. Like that's really good. Now, I actually think there's also a lot of really good programs in a lot of these areas and a lot of these metros. Look them up. They have this distressed uh office building property where people are actually going in and they're converting these office buildings into residential real estate, into apartments, into uh boutique hotels, different things like that, that you can actually convert them. And there's these conversion grants and programs in these cities. Make sure that you guys go and look it up, especially in some of these major cities. Now, here's some quick hits for you guys before we dive into the main.

Quick Hits Across AI And Markets

About 60 seconds each. Number one, Andre Karpathy, which is like the GOAT of AI, he actually coined the term vibe coding, joined Anthropic's pre-training team. Karpathy is one of the co-founders of OpenAI, and he was the head of Tesla AI. Now he's at anthropic. The talent gravity in the AI race moved decisively in May. I mean, huge. And the guy who literally helped found OpenAI moved to Anthropic, that's the talent moat your LPs will eventually ask you about. And if you have any AI exposure in your funds, tools, or thesis, this is the signal that the AI consolidation we keep talking about is not slowing down anytime soon. Number two, the Pentagon struck AI deals with eight big tech companies and they shunned Anthropic. CNN reported this earlier in May. Pentagon issued AI service contracts to eight major tech firms. Anthropic wasn't one of them. And here's what I think is happening: the market just split into two. Government AI and is one game, enterprise AI is another, and Anthropic just took the bigger one. The non-anthropic AI companies will fight over defense department revenue. Anthropic gets to focus on the private sector, which is where the actual margin is, honestly. These big like these big government contracts sound good, but most of the margin margin is in uh enterprise. Number three, the Vatican is publishing its first ever encyclical on artificial intelligence, which is kind of crazy because I think they're actually like putting a stake in the sound on talking uh sand on talking a lot about like the morality and even on like the religiousness of AI and and humanizing AI and the Pope, who I think is probably one of the most. Most tech forward popes ever, and I guess by nature, because of the timing of it, is but he, you know, he you know, they talk about the whole thing of having like a soul and humanizing it, and he really is talking about and taking a hard stance on hey, there's a big separation there, and we don't believe in and we don't support AI weapon weaponry. And what's also very, very interesting is it's also being co-presented by an anthropic co-founder who is actually an atheist. But the Catholic Church is going on the record about AI and they're doing it with anthropic, not against it, which is they could have chosen anybody. They had they could have chosen all of them together, but instead, like chose to write it with them because I think anthropic is taking the stance on being like the morally forward AI frontier lab. And the Pope is signing the same document as the Anthropic co-founder. If you think that AI is a fad, then you're now arguing with the Vatican. So just internalize that for a second. But what's actually very interesting is throughout this process, like OpenAI was also like, I think like lobbying against this because it holds so much weight. But um, number four, prop tech venture capital, real estate technology poured, but number four on prop tech venture capital, and then a little bit on real estate technology is poured $1.7 billion into the category of prop tech. Now, venture capital, prop tech venture capital, which is real estate technology, right? Property technology poured $1.7 billion into the category in January 2026 alone. That is a hundred and seventy six year over year in increase. And there are four new Prop Tech Unicorns since mid-2025. Every single one of them is AI driven. The application layer of the AI infrastructure boom is here. Proptech just had four unicorn births in one year, which is a unicorn is a billion-dollar company, which means that they do over 100 million in revenue a year. You should know who they are if you are operating in this space. Even if you don't buy their tools, they are setting the new normal for your LPs and they're going to compare them to you. And honestly, like I'm hoping to be one of them with fun flow in the next whoever knows, eight to ten years. But number five, the US-Iran war continues, and the Strait of Hormuz is still effectively closed. Oil is at a four-year high, and U.S. natural gas just topped $3 per million BTU for the first time since March. And here's a little bit of a contrarian thinking that nobody on like CNBC is gonna talk about, but I'm gonna talk about it because I think that this is only good for America. The longer the Strait of Hormuz is closed, then the better it is for us. We are the one major country that does not rely on the strain of humor Hermuz. Europe does, Japan does, South Korea does, India does, China does. We don't. The longer this plays out, the more it hurts the rest of the world, and the more it puts us in a power position. And I think this is where like energy, energy, and gas starts going through the the, I guess, the Gulf of America now. Energy, independence, dollar reserve status, treasury demand, all of it strengthens at the margins while everyone else strains. This is not a take that you're going to hear on mainstream financial media, but if you are pricing oil adjacent, energy adjacent, or commodity adjacent deals in your fund, this is the framing to use with their LPs and with anybody as you're kind of going in this direction. Every day this conflict continues, the relative US position improves. Price your deals with that lens, and you might actually luck out, but that's just my

Build The Firm Not Just Funds

take. Last story here, and this one you should kind of pay attention to. On May 6th, the A16Z Podcast dropped an episode that I haven't stopped been able to think about. And it was David Haber who sat down with Tony James. And if you don't know who Tony James is, he was the president and chief operating officer of Blackstone. Before that, he beat built DLJ, Donaldson, Lufkin, and Jinrit from a subscale firm into one of the most respected names on Wall Street. The episode is a masterclass on building an enduring firm. And there are three takeaways for fun operators in this audience. Takeaway number one, structure beats vision. Most syndicators have no structure beyond, hey, deal sponsor, LP equity, DLJ scaled and Blackstone scaled, not because of a brilliant idea. They scale because of governance and structure that let the firm survive multiple leadership transitions, market cycles, and regulatory shifts. If your firm depends entirely on you, you have a ceiling. That ceiling is $50 million in AUM, give or take. Above that, structure has to take over. Vision is not enough. Takeaway too, identify structural opportunities before the market catches on. DLJ was the firm that scaled the leverage buyout in the late 70s. Blackstone built the private credit category post the great financial crash. The smart firms identify the structural arbitrage two to three years before it becomes consensus. Right now, in 2026, the structural arbitrage is data center infrastructure. I don't know how many times I have to talk about this or you guys have to hear about this. It's also AI native fund operations, tokenized real estate, distressed commercial debt. Pick one or pick more than one, but have a clear answer for where is our edge in the next five years? Takeaway number three, and this is the one that hits me the hardest, honestly. The firm is the product, not the fund. Tony James said his job at Blackstone wasn't picking deals, it was building the firm that picked the deals. He hired the team, he built the structure, he set the culture. The deals were the byproduct of that. The firm is the product, not the fund. The firm is. Most fund operators in the audience think that their fund is the product. They're wrong. The fund is the wrapper of it. Like the firm is the product. Until you internalize that, then you're gonna hit a ceiling that I just talked about. This is exactly the philosophy that we talk about. We want to build around that long arc fund operating, not one deal hustling. We're we want to help people and teach people to build the firm, not just close the fund. If that frame resonates with you, then check it out. Check us out at Fund Founders. Like we are fundfounders.com. Uh, you can grab a freebie there on free capital raising or just a 101 on what is the fund? How do you launch it? And here's what to do this week. This is the takeaway for you. Sit down, one paragraph, write the answer to this question. What is your 10-year vision for your firm? Like, what do you want? Not the fund, the firm. 10 years out. How many people work there? What does it do? Like, what does it own? How does it operate? What does it look like? If you can't write that paragraph, that's your answer. You have a fund. You don't have a firm, then you have work to do this year. The funds that survive the next 10 years will be the ones that start building the firm in the next 12 months, not year five, but in the next 12 months. That's the playbook for you. Now, I hope this is helpful. I hope all of these, these, this news, the things that are going on, and I hope that little segment was helpful for you to understand and to shift the paradigm on what you should be doing and how you should be pushing your firm, your your like thinking through your fund, thinking through your investments, what you're gonna be doing with AI, all that stuff.

Subscribe Review And Closing

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