Compute supply—not demand—is the next dislocation risk: capex can be committed, but regulatory, permitting, and geographic constraints on data centers could throttle supply and knock on to the semiconductor cycle.
Nikesh Arora identifies supply-side constraints—regulatory approvals, permitting, states restricting data centers, European barriers—as the likely next dislocation, since demand is effectively infinite. ✦ AI generated
Nikesh Arora · 20VC · 2026-08-06 · original ↗
starts at this moment · 102:16
I think the next dislocation could happen is in the supply of compute. You can bring all the capex to bear but I think to your point the valors may not get their their regulatory uh set of approvals. Europe may not allow data centers. You may find 30 states with you know picket fences which say no data centers in my state. So there's a supply problem that happens in comput side which could have a knock-on impact on all our infrastructure buddies in the semiconductor space saying holy doesn't look like all the stuff they're building is going to go out as fast as we thought it was going to go out.
verbatim transcript · starts at 102:16
(01:01:17) of dollars building 3G, 4G, 5G and then they'd see the rewards would come later. So they went through a capex cycle and that's pretty established in the market. Looks like we're going through this compressed version where capex and revenue have to show up pretty close to each other because the numbers are just way too big to be funded by speculators for long periods of time. So I think
(01:01:36) that's kind of what we're seeing and that's why this bring back the whole open anthropic debate. It doesn't matter if they show up with the money or not. Somebody will show up because there's enough demand. I think the next dislocation could happen is in the supply of compute. You can bring all the capex to bear but I think to your point the valors may not get their their
(01:01:54) regulatory uh set of approvals. Europe may not allow data centers. You may find 30 states with you know picket fences which say no data centers in my state. So there's a supply problem that happens in comput side which could have a knock-on impact on all our infrastructure buddies in the semiconductor space saying holy doesn't look like all the stuff they're building is going to go out as fast as
(01:02:13) we thought it was going to go out. So I think that's kind of that's kind of where we are at the the market mechanics level. I don't think there's a demand problem. I don't think there's a jobs problem. I don't think there's a appetite or intent problem in terms of all us all of us wanting to rewrite this stuff. And I think to Jason's point, you know, why not? Palunteers at the party,