52 seconds capital

Month: September 2025

Oracle’s stock is set for its biggest post earnings pop in years.

The trigger for that?

A single, staggering metric: Remaining Performance Obligations (RPO) soaring to $455 Billion.

That nearly half a trillion dollars!

And this number highlights one specific facet of AI.

And it’s not ‘training’.

It’s a vote of confidence (from some of Oracle’s biggest clients) that ‘inferencing’ will draw some of the largest AI-related spends over this decade.

Since early-2023, we have all been captivated by the AI-trained LLMs (Chat GPT, Gemini, Grok, Llama).

Larry Ellison, on the earnings call, was pretty clear about why inferencing could be a bigger deal for long-term AI evolution.

Here is what he said:

“Training AI models is a gigantic multi-trillion-dollar market. It’s hard to conceive of a technology market as large as that one. If you look closely, you can find one that’s even larger. It’s the market for AI inferencing. Millions of customers using those AI models to run businesses and governments.

In fact, the AI inferencing market will be much, much larger than the AI training market”

And why is inferencing bigger?

A simple way to look at this would be:

The training phase is when you show an AI model thousands of pictures of cats and dogs. The AI model studies them, learn the patterns (ears, whiskers, paws), and eventually figure it out. This phase is undeniably expensive and time-consuming.

Inferencing is when you want to use AI, and so it’s that moment when you ask, “Is that a cat or a dog?”

This is the entire point of the training (and of AI)

Inference happens every time …

– Every time you ask ChatGPT a question

– Every time Netflix recommends a show

– Every time your phone unlocks with face ID

That explains the post earnings pop because Oracle, by virtue of being the world’s largest custodian of high-value private enterprise data, is undeniably in pole position to corner inferencing capacity.

Ps: There is no word in the English language for the opposite of ‘Oracle’.

Maybe there is.

‘Jim Cramer’ perhaps?

But hang on … who do you see taking a victory lap today?

By

Avinash Menon, CFA

Founder and CEO,

52 Seconds Capital Limited

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The Trump administration’s relentless attack on the Federal Reserve is the symptom of a deeper desperation: of an administration rapidly running out of options to manage the country’s gargantuan and growing debt pile. (Currently at $37T)

The DOGE dissolution earlier this year was a critical moment.

It proved conclusively that those ‘third rails’ of fiscal policy — raising taxes and cutting entitlement spending — cannot be touched.

Attacking the Fed, Tariffs, and ad-hoc interventions into Corporate America (like the Intel stake and the revenue share with NVDIA and AMD) are anyway piecemeal approaches and do not really address the scale of the problem.

(What do you make of the fact that, the country, with unarguably the most powerful military on the planet, already spends more on interest payments to service debt than on Defence?)

All three approaches are marginal tools, not an outcome focused strategy. They merely chip at the edges of a towering pile of debt.

So, what then could be a more serious, effective option?

Think about it.

When households are in a similar situation, saddled with a truckload of debt and if the interest payments really start to crowd out all other spends, what would you do?

You would do the ONE thing that can truly alter the situation meaningfully.

Asset Sales.

The US government is one of the world’s largest landowners and asset holders, with over 640 million acres (that about 30% of total land acres), vast energy rights, infrastructure, and IP.

Asset sales or Asset Recycling initiatives isn’t without a precedent.

Facing similar political constraints, Australia incentivized its states to sell mature, public assets (like ports and power networks) and used the proceeds to fund new, productivity-boosting infrastructure.

The federal government contributed 15% of the funding for new projects, creating a powerful ‘two-fer’: unlocking investment for the future while recycling capital from the past.

The logic is compelling:

✅ Politically palatable: Easier for voters to buy-in than cuts to entitlements or tax hikes.

✅ Fiscally pragmatic: Generates a massive, one-time revenue infusion to pay down debt.

✅ Forward looking: Can be designed, as in Australia, to fund critical new investment in national infrastructure.

So, while the US has never done this before; asset sales, may soon move from the fringe to the center of the debt debate.

It appears inevitable.

Granted, governments, unlike households, get to binge on potentially infinite debt.

But there are finite limits to interest payments. (Assuming that we do not descend into the Kafkaesque zero or negative rate world! 😀)

And when you can’t raise revenue or cut spending to service those rising interest payments, you will eventually — whether you are a government or household — have to look at your balance sheet.

And establish a pecking order for the sale of your assets.

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Avinash Menon, CFA

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It’s tough to miss the irony.

The Trump administration’s recent decision to acquire a stake in Intel (see image, source: Intel’s press release on Aug 22, 2025), with unconfirmed reports of similar moves ahead in U.S. defence contractors, has many in business and policy circles in the US and across the world doing a double take.

That is because this is exactly the kind of move the U.S. has spent years criticizing China for.

In China:

The government directly owns big chunks of strategic companies like AVIC (aviation/defence), CSSC (shipbuilding), and Cambricon (AI chips).

Even NIO, the Chinese EV champion, got a $1B bailout from state-owned funds in 2020 — saving it from collapse and giving the local government a seat at the table.

This model — where the state owns pieces of major companies and steers them toward national goals (which may not really coincide with shareholders’ goals) — is what you would usually call State Capitalism. And across decades now the messaging has been that State Capitalism is unfair, market-distorting, and… well, un-American.

But now?

If Washington starts doing the same — equity stakes in chipmakers and defence firms — then are we seeing the initial contours of the US version of it?

Some American commentators are calling this a step towards becoming a Command Economy eventually (how else would you explain Apple’s $600 billion US commitment and its launch of the American Manufacturing Program?).

Command Economy?

Doesn’t that kind of sound more Soviet than American?

Sure, the reasons are there and are undeniably significant when viewed from the lens of American interests: national security, reshoring, tech competition with China.

But the response to those threats?

It does sound like the beginnings of a change in the DNA of the American Free Market Capitalism as we knew it.

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Avinash Menon, CFA

Founder and CEO,

52 Seconds Capital Limited

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