Michael Cembalest
Chairman of Market & Investment Strategy, JPMorgan Asset Management
“we are in a linear transition and not what is often portrayed as a geometric one.”
“the power that's behind all these data centers is mostly natural gas, whose prices are roughly flat this year in the US.”
“I'm taking the under on some of the McKinsey Bain BCG type numbers.”
“West builds nuclear at roughly 20 to 25% of the cost of the big four white elephants.”
“the last three months the hyperscalers are starting to roll over even though the semiconductor index is zooming. At the end of the day, if the big four hyperscalers plus Oracle can't convince the market that they're earning a good return on a trillion 5 of capital spending outlays, those infrastructure stocks are at risk at some point.”
“for the last few years, the big hyperscalers have been financing their capital spending out of internally generated cash flow. And just towards the end of last year, they started borrowing to do it... the free cash flow projections for the hyperscalers are heading very low.”
“the hyperscaler is using their own in house chips report total cost of ownership reductions of 30 to 40%... for the last few years we were all told that Nvidia GPUs were untouchable... That was wrong. And all those companies... have been able to build their own accelerators.”
“I have a version of a deficit clock in my head except it's the price per megawatt of a combined cycle gas turbine which doubled over the last three years and is still rising. Around 80% of semiconductors and related things are not subject to these tariffs. But only 20% of the kind of power build out is subject to those exemptions. And that's where the bottlenecks are.”
“some data is coming out of OpenRouter showing that almost 50% of all of the tokens from US companies are being directed to Chinese models rather than the US Frontier... a free model trained on their own data does a better job than some of the Frontier Labs, which are much more expensive.”
“within JP Morgan there are lots of CFO meetings about escalating token costs and what should be done about it... every CTO is being asked, why can't we use some of these tools to displace some of the vendor software relationships we have? And even if we can't, can't we call our vendors and threaten to do it unless they cut our subscription fees in half?”
“the way that these providers hedge these exposures is they have to buy on the way up and they have to sell on the way down... you're going to get a lot of 2:30pm to 4:00pm noise. My favorite indicator... is the margin loans on the Cosby... Korean retail is basically the scariest market indicator because by the time those guys start to pile into stuff, you're really, really, really late in the game.”
“my concern is in 2031 or 2032, you reach this crossover point where 100% of federal tax revenue has to use to pay interest on the debt and entitlements with nothing left or anything else. That is a scary day.”
Michael Cembalest
One-line summary: Chairman of Market & Investment Strategy at JPMorgan Asset Management; tracked for skeptical, math-grounded takes on AI power demand and nuclear costs.
What they're known for
Brief factual context — fill in.
Why they matter to stock-market
Why this person's claims are tracked here — fill in.
Said
Speaker-attributed claims extracted from diarized sources. Each bullet mirrors one entry in quotes: frontmatter — keep them in sync.
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On ai-capex-to-power-and-materials-cascade, energy-shock-2026-vs-2022:
"we are in a linear transition and not what is often portrayed as a geometric one." — 2026-06-23-podcast-columbia-energy-exchange-michael-cembalest-does-the-math-on-the-energy (2026-06-23)
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On ai-capex-to-power-and-materials-cascade, energy-shock-2026-vs-2022:
"the power that's behind all these data centers is mostly natural gas, whose prices are roughly flat this year in the US." — 2026-06-23-podcast-columbia-energy-exchange-michael-cembalest-does-the-math-on-the-energy (2026-06-23)
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On ai-capex-to-power-and-materials-cascade:
"I'm taking the under on some of the McKinsey Bain BCG type numbers." — 2026-06-23-podcast-columbia-energy-exchange-michael-cembalest-does-the-math-on-the-energy (2026-06-23)
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On nuclear-baseload-for-ai-data-centers:
"West builds nuclear at roughly 20 to 25% of the cost of the big four white elephants." — 2026-06-23-podcast-columbia-energy-exchange-michael-cembalest-does-the-math-on-the-energy (2026-06-23)
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On mega-issuance-peak-to-ai-capex-derate:
"the last three months the hyperscalers are starting to roll over even though the semiconductor index is zooming. At the end of the day, if the big four hyperscalers plus Oracle can't convince the market that they're earning a good return on a trillion 5 of capital spending outlays, those infrastructure stocks are at risk at some point." — 2026-07-10-podcast-the-compound-and-friends-the-real-ticking-time-bomb-with-michael-cembalest (2026-07-10)
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On mega-issuance-peak-to-ai-capex-derate, steroid-era-earnings-inflation:
"for the last few years, the big hyperscalers have been financing their capital spending out of internally generated cash flow. And just towards the end of last year, they started borrowing to do it... the free cash flow projections for the hyperscalers are heading very low." — 2026-07-10-podcast-the-compound-and-friends-the-real-ticking-time-bomb-with-michael-cembalest (2026-07-10)
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On cuda-moat-erosion-to-nvda-rerate, cuda-moat-erosion-at-inference:
"the hyperscaler is using their own in house chips report total cost of ownership reductions of 30 to 40%... for the last few years we were all told that Nvidia GPUs were untouchable... That was wrong. And all those companies... have been able to build their own accelerators." — 2026-07-10-podcast-the-compound-and-friends-the-real-ticking-time-bomb-with-michael-cembalest (2026-07-10)
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On ai-capex-to-power-and-materials-cascade:
"I have a version of a deficit clock in my head except it's the price per megawatt of a combined cycle gas turbine which doubled over the last three years and is still rising. Around 80% of semiconductors and related things are not subject to these tariffs. But only 20% of the kind of power build out is subject to those exemptions. And that's where the bottlenecks are." — 2026-07-10-podcast-the-compound-and-friends-the-real-ticking-time-bomb-with-michael-cembalest (2026-07-10)
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On open-source-share-shift-bullish-for-compute:
"some data is coming out of OpenRouter showing that almost 50% of all of the tokens from US companies are being directed to Chinese models rather than the US Frontier... a free model trained on their own data does a better job than some of the Frontier Labs, which are much more expensive." — 2026-07-10-podcast-the-compound-and-friends-the-real-ticking-time-bomb-with-michael-cembalest (2026-07-10)
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On seat-based-saas-ai-disruption, agentic-ai-seat-erosion-to-saas-rerate:
"within JP Morgan there are lots of CFO meetings about escalating token costs and what should be done about it... every CTO is being asked, why can't we use some of these tools to displace some of the vendor software relationships we have? And even if we can't, can't we call our vendors and threaten to do it unless they cut our subscription fees in half?" — 2026-07-10-podcast-the-compound-and-friends-the-real-ticking-time-bomb-with-michael-cembalest (2026-07-10)
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On hidden-leverage-beyond-margin-debt:
"the way that these providers hedge these exposures is they have to buy on the way up and they have to sell on the way down... you're going to get a lot of 2:30pm to 4:00pm noise. My favorite indicator... is the margin loans on the Cosby... Korean retail is basically the scariest market indicator because by the time those guys start to pile into stuff, you're really, really, really late in the game." — 2026-07-10-podcast-the-compound-and-friends-the-real-ticking-time-bomb-with-michael-cembalest (2026-07-10)
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"my concern is in 2031 or 2032, you reach this crossover point where 100% of federal tax revenue has to use to pay interest on the debt and entitlements with nothing left or anything else. That is a scary day." — 2026-07-10-podcast-the-compound-and-friends-the-real-ticking-time-bomb-with-michael-cembalest (2026-07-10)
Sources
- 2026-06-23-podcast-columbia-energy-exchange-michael-cembalest-does-the-math-on-the-energy
- 2026-07-10-podcast-the-compound-and-friends-the-real-ticking-time-bomb-with-michael-cembalest
Related
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