# Cloud cash flow could finance more of the 2027 AI buildout

Markdown copy of https://realalpha.app/s/cloud-cash-flow-could-finance-more-of-the-2027-ai-buildout/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Gavin Baker](https://realalpha.app/people/gavin-baker/) · Managing partner & CIO, Atreides Management · Runs the Atreides Management investment firm, a technology investor and former Fidelity OTC Fund portfolio manager.
- Host: [John Coogan](https://realalpha.app/people/john-coogan/) · Co-host, TBPN · Co-founded Soylent and Lucy; OpenAI bought his show TBPN in April 2026.
- Host: [Jordi Hays](https://realalpha.app/people/jordi-hays/) · Co-host, TBPN · Founded Branded Native; co-founded fintech Capital, which Rho bought.
- Show: TBPN
- Episode: [Technology Is Back, Gavin Baker Live, Math Solved Again, Anduril Laptop, DoorDash + Instacart](https://realalpha.app/v/OV1QfQ3C29Q/), Oct 27, 2026
- Moment: 1:55:36 to 1:59:36 of the episode (4 min), playing on https://realalpha.app/s/cloud-cash-flow-could-finance-more-of-the-2027-ai-buildout/; the episode from there: https://realalpha.app/v/OV1QfQ3C29Q/?t=6936

## Quote

> “So, like, I don't know if we've seen the **peak of external financing**, but I think we're getting close.”
> — [Gavin Baker](https://realalpha.app/people/gavin-baker/) at [1:59:12](https://realalpha.app/v/OV1QfQ3C29Q/?t=7152) · TBPN

## Takeaways

1. Cloud growth may keep accelerating through 2027.
2. High margins can turn revenue growth into operating cash.
3. IPO liquidity could expand mutual-fund buying power.

## About this segment

Gavin Baker expects cloud growth and high margins to generate cash for more of the 2027 buildout. He thinks external financing may be nearing its peak.

From “Technology Is Back, Gavin Baker Live, Math Solved Again, Anduril Laptop, DoorDash + Instacart”, Oct 27, 2026. [Watch the full episode](https://realalpha.app/v/OV1QfQ3C29Q/)

## Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[1:55:44](https://realalpha.app/v/OV1QfQ3C29Q/?t=6944) How are you thinking about the evolution of like the marginal capital decider sort of changing in 2027 potentially? Like if you go back a couple of years, you have essentially like seed stage VCs making bets on these. AI labs, and then eventually some more scaled up venture firms being important capital partners. Some of them have taken board seats, but they are not deciding the race now. It's big hedge funds, pre-IPO rounds, but we're coming up to a world where the fidelities of the world, the insurance agencies are going to be involved in the insurance funds and sovereign wealth funds are going to be increasingly involved in financing the build out.

[1:56:27](https://realalpha.app/v/OV1QfQ3C29Q/?t=6987) Like, what does the next year look like from a perspective of, like, how we get the big dollars into the AI build out? I mean, I think you named all the big dollar sources. Yeah. And something that I think is pretty underappreciated is, you know, American mutual funds. OK. You are limited in the percentage you can hold in a liquid asset. Sure. And so SpaceX and Anthropic going public is actually going to free up a huge amount of buying power in private markets once those are fully unlocked because they have to be public and unlocked.

[1:57:09](https://realalpha.app/v/OV1QfQ3C29Q/?t=7029) So I think you will see mutual funds, you know, and they've always been involved. You know, my former colleagues, Capital Research, T. Rowe Price, M. Sam, G. Sam, you know, Franklin Templeton. If I forgot anyone, I'm sorry. I love you all. But they've been pretty involved. I mean, the sovereigns have been very involved, particularly, you know, particularly the ones in the GCC and particularly the ones in the UAE.

[1:57:40](https://realalpha.app/v/OV1QfQ3C29Q/?t=7060) Yeah. Like MGX, Mubadala, all the sovereigns there. I mean, Atreides and Valor, we co-led Crusoe with Mubadala. So I think the UAE in particular has been extremely front-footed with all their sovereigns with respect to AI. And now Apollo is taking a stake in Mubadala, which sort of completes the cycle. Yes, yeah. um but i mean that that's gonna have to evolve but it's also i do think we're probably getting has these underpriced so all these clouds they signed contracts at well below what are below market values and has those contracts reprice higher has they bring on more compute with more spot like we discussed with you know the same thing that core weave is is is trying to do i do think you're going to see like there's a pretty big acceleration in the clouds last quarter and you know forget relative to expectations this or that but i think you're going to see a pretty

[1:58:48](https://realalpha.app/v/OV1QfQ3C29Q/?t=7128) continuous acceleration in the sum of the big hyperscaler cloud revenue growth the neo clouds That number is just going to continue to accelerate and then, you know, it's dropping down at very high margins so that, you know, operating cash flow is following and then you're going to be able to, I think, finance probably more than people think of the 2027 build out out of cash flow. So, like, I don't know if we've seen the peak of external financing, but I think we're getting close.

[1:59:27](https://realalpha.app/v/OV1QfQ3C29Q/?t=7167) Yeah, yeah, that's. And that'll be really helpful. Totally. Yeah.