The grid doesn’t care how your state votes

Arista Networks reported Q2 revenue of $3.04 billion, up 37.7% year-over-year, with a 45.5% operating margin and $1.2 billion in net income, sending shares up 11% as the company forecast $3.3 billion in current-quarter revenue. The results highlight strong demand for data center networking gear amid AI infrastructure buildouts.

The grid doesn’t care how your state votes Today, we're talking about AMD and Arista's Q2 results, Airtable's clever gambit to squirrel away IP, AI regulation, and Texas's data center mess. Wednesday. SpaceX’s results were the main event yesterday, so CO wrote up a digest: space revenue rose, Starlink proved strong, and so did AI compute growth https://www.cautiousoptimism.news/spacex-trounces-q2-expectations-investors-shrug/ . So why are the company’s shares down 7% this morning? Market https://www.cnn.com/2026/08/04/business/spacex-earnings-q2-2026 commentators are blaming https://www.cnbc.com/2026/08/05/spacex-spcx-stock-today-earnings.html massive AI spending https://finance.yahoo.com/technology/article/spacexs-stock-drops-as-ai-capex-costs-jump-in-q2-132323178.html?guce referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce referrer sig=AQAAAGMzQy4q7anJoscI9e7BhGeFJzl5hGGIc oUnmn8tsa28fSEDOUceOodVMZWyfjphNjUEUr0l-tNkm88VQ4Ul3JaAhAXe7xlHYNfetFB 9V8RzI-ImQ5fdmGuj80XwZSIj7OVXmdNJRpNA44bpAlmzPHNwGIuq-TIEwCno9MslLQ capex ramp : Despite the company’s pledge to reach run-rate revenues of $100 billion by December more than 3x its run-rate in Q2 , investors are putting more weight on SpaceX’s current results than its promises. With that out of the way, here’s what we’re covering today: Critical earnings, an update to the Airtable story, AI regulation, and Texas’s data center mess. To work — Alex P.S.: I put OpenAI’s latest progress in maths https://openai.com/index/ten-advances-in-mathematics/ to my mathematician friend yesterday at lunch. He explained sofic and non-sofic groups over tacos https://www.dolorespvd.com/ to contextualize the AI lab’s claims. I understood bits and pieces. The gist was that OpenAI is making real progress in the field, though its results require domain-specific knowledge to unspool. 📈 Trending Up e Sports washing https://www.theverge.com/games/974736/ea-private-company-deal-closed … attacks on basic infrastructure https://abcnews.com/US/12-states-face-cyberattacks-water-systems-sources/story?id=135348482 … DigitalOcean’s growth rate https://investors.digitalocean.com/news/news-details/2026/DigitalOcean-Announces-Second-Quarter-2026-Financial-Results/default.aspx … wrist slaps https://www.politico.com/news/2026/08/04/open-ai-discrimination-settlement-doj-01024742 … open-source safety AI https://mistral.ai/news/shieldstral/ … Astera Lab’s growth rate https://ir.asteralabs.com/news-releases/news-release-details/astera-labs-reports-second-quarter-2026-financial-results … agentic commerce https://www.reuters.com/business/retail-consumer/amazon-loses-us-court-ban-perplexitys-ai-shopping-tools-2026-08-04/ ? … massive secondary funds G Squared edition https://www.globenewswire.com/news-release/2026/08/05/3339337/0/en/g-squared-announces-final-close-of-2-3b-g-squared-vii-its-largest-flagship-fund.html … small venture funds Don’t Quit Ventures edition … https://assets.super.so/a370eb6e-4e00-434b-8525-af65bdc4c41c/files/96a822a1-52ef-4948-9321-2221b87b498d/press release - dqv.pdf Revenant VC, too https://www.axios.com/newsletters/axios-pro-rata-36b14bb8-ca85-4b58-9d69-204c8c77b561 Arista Networks: Tired of talking about GPUs? Good, let’s talk about switches. Arista Networks sells high-speed networking gear for data centers. You could have bought into the company at a $2.75 billion valuation https://www.reuters.com/article/world/americas/arista-networks-ipo-values-company-at-about-275-billion-idUSKBN0EG2U5/ . Today? It’s worth more than $240 billion, with its shares up 11% after it reported https://www.arista.com/company/news/press-release/24401-pr-20260804 $3.04 billion in Q2 revenue, up 37.7% from a year earlier. With a 45.5% operating margin and $1.2 billion in net income, Arista is cooking. Investors loved the report, particularly the company’s revenue forecast of $3.3 billion for the current quarter. - To sum up this earnings cycle: Hyperscalers are still compute-constrained, investors are worried about capex, AI continues to grow, and everyone is mad. AI regulation opacity: After reporting that the White House does not plan to publicly release https://www.axios.com/2026/08/04/white-house-ai-framework-under-wraps its framework for evaluating AI models, Axios has managed to secure details https://www.axios.com/2026/08/04/trump-ai-framework-open-models . That’s journalism, baby Which models are regulated? The ones that are closed-source, SOTA, and present national security risks. What happens to them? A “30-day pre-release government review period,” Axios reports, during which “employees would be limited from accessing models.” What? Who reviews them? Several different people in the Trump administration, not an agency. The good news seems to be that no open models will be subject to these rules, and it appears less-performant closed-source models may also dodge oversight. Precisely which new AI models and what percentage of those will meet the covered-model test is not clear. This isn’t great for leading American AI labs, though non-SOTA American AI labs may breathe easier, as will everyone building open models. - In effect, the White House is penalizing closed-source AI developers. By freeing their open-weight and open-source rivals from oversight, it’s putting OpenAI, Anthropic SpaceXAI and others at an effective disadvantage to open models from China. An interesting policy choice. Missing a trick: Our coverage of Airtable’s oddly-inexpensive exit to Bending Spoons https://www.cautiousoptimism.news/airtable-throws-in-the-towel/ failed to mention that the selling startup had moved the IP for its latest product, an AI agent orchestration platform, into a separate vehicle and kept it from the sale. Sure, Bending Spoons is getting all the Airtable revenue at the price mentioned, but it looks like the Airtable team gets to keep Hyperagent: Prior to entering into the Purchase Agreement, Seller and its affiliates implemented a reorganization pursuant to which Seller became the sole holder of the Shares, and assets and liabilities relating to the “Hyperagent” business line were transferred by the Company to Hyperagent Inc. What is ‘Hyperagent?’ Previously called Superagent https://www.airtable.com/newsroom/introducing-superagent , it is Airtable’s “first standalone product built on multi-agent coordination,” offering “a coordinating agent that plans the work, deploys specialists who work in parallel, and synthesizes their output into a finished deliverable you can immediately use.” There are a host of companies working along similar lines, but given that the Airtable team has a proven history of making complex software approachable to regulars, it may have a shot. - I have no position on whether or not Hyperagent is good , but the unit getting spun out before its parent company got sold does indicate that Airtable’s founders at least got to keep their new darling. Not bad. Agentic commerce? Regular CO readers have been forced to endure our ramblings on the x402 protocol, a piece of technology that could turn online content into something natively monetizable. This week, Cloudflare announced ‘ cloudflare.pay https://www.cloudflare.com/press/press-releases/2026/cloudflare-gives-ai-agents-an-identity-and-a-wallet/ ,’ a service which provides “stable identity and the ability to make purchases online safely within limits set by their human creators.” Combine that with x402 and the company’s Monetization Gateway https://blog.cloudflare.com/monetization-gateway/ , which allows websites to charge agents, and you end up with all the pieces you need to sell website access to agents on a per-session basis. What’s a web crawl worth? We’re about to find out Google’s efforts to improve search is lowering inbound traffic, per everyone I know who has an analytics dashboard, so the risk of limiting free access to your website is declining. And Cloudflare is building the infra we need for the next era of dicking around online. The Optimistic Take: If people who create high-value from the perspective of an AI agent content can charge cents per crawl/scrape, the entire economic scaffolding of the Internet could change. I don’t think that such a revolution would leave all incumbent heads atop their rent-fed bodies. 📉 https://finance.yahoo.com/news/servicenow-pledges-1-5bn-investment-110000403.html Trending Down 📉 https://finance.yahoo.com/news/servicenow-pledges-1-5bn-investment-110000403.html Social media ethics https://www.bloomberg.com/news/features/2026-08-04/confidential-tiktok-report-shows-algorithm-safety-feature-withheld-from-millions?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc4NTg4MDgzNCwiZXhwIjoxNzg2NDg1NjM0LCJhcnRpY2xlSWQiOiJUSjlKT0dLR1pBS0wwMCIsImJjb25uZWN0SWQiOiI4OUM4OTNDMDhGOTQ0NThDQkQwQTQyREY1RDFCOTY0QyJ9.tMOZWjAXRRdbkzg56wnLVgH9O83cCgY5k5OetdzzWQY ? … Coupang, after earnings https://www.koreajoongangdaily.com/business/coupang-posts-biggest-quarterly-loss-since-new-york-listing/12809347 … Pinterest, after earnings https://www.cnbc.com/2026/08/04/pinterest-pins-q2-earnings-report-2026.html … token budgets at Microsoft https://www.404media.co/microsoft-tells-engineers-tokenmaxxing-is-not-what-we-are-optimizing-for/ … paying down the national debt https://www.cnbc.com/2026/08/05/trump-tariffs-refunds-ieepa-lawsuit.html … interest rate cuts https://www.cnbc.com/2026/08/05/feds-kashkari-says-now-is-the-time-to-start-slowly-moving-rates-up.html AMD: American semiconductor giant AMD beat Q2 expectations for both revenue and profit https://ir.amd.com/news-events/press-releases/detail/1295/amd-reports-second-quarter-2026-financial-results , reporting revenue of $11.54 billion $11.28 billion expected https://www.cnbc.com/2026/08/04/amd-earnings-report-q2-2026.html and adjusted profit of $1.66 per share $1.62 expected . Those results and 50% revenue growth were not enough to sate investors, though, who proceeded to throw out their AMD shares following the results. AMD’s margin soared from 40% Q2 2025 to 54% in its most recent quarter; gross profit rose at more than twice the pace of revenue; data center revenue of $6.7 billion was up 107% compared to the year-ago quarter; and the company told investors it expects revenue of $12.7 billion to $13.3 billion in its current quarter. During its earnings call https://finance.yahoo.com/quote/AMD/earnings/AMD-Q2-2026-earnings call-660937.html , AMD stressed that its new Helios https://www.amd.com/en/blogs/2026/amd-launches-helios-the-highest-performing-rackscale-ai-infrastructure-solution.html system, which combines AMD CPUs EPYC Venice , GPUs MI450 series , networking Pensando , and CUDA ROCm , “delivers up to 15% more throughput at the same rack power and up to 30% more tokens per dollar than the competition.” Who doesn’t love savings? Perhaps Helios will help AMD once again beat expectations in its current quarter. After which I am sure investors will reward it with another selloff. - During its own earnings call, SpaceX said it intends to deploy only Nvidia GPUs in the future, which is likely what investors are considering to be a blow to AMD’s prospects against its larger rival. - Why do we care what a single neocloud buys? Because SpaceX has a massive warchest and even larger capex plans. Hey, slow down Rewind the clock back a few weeks, and the state of New York pausing data center permitting was Big News. Lots of folks were rather angry. POTUS criticized https://www.cnbc.com/2026/07/15/trump-blasts-new-york-gov-hochul-over-ai-data-center-moratorium.html the move; op-eds sounded off https://www.newsweek.com/new-yorks-data-center-moratorium-is-nonsense-policy-opinion-12277980 , and some folks even compared it to a ban on fracking https://www.independentwomen.com/2026/08/03/new-yorks-data-center-moratorium/ . 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