Venture Capital has quickly become the ‘who invests in AI company X, Y, Z, first’ race. Besides quick returns, there is more to this story. Here’s the breakdown.
Best contrarian AI take I've read this month. do you buy the "grid, not valuations" thesis or is the power bottleneck just another thing capital eventually muscles through?
I think it’s part of it. The other question I didn’t cover, because the piece was already long enough, is if the deliberate fear mongering with AI being so smart and you can’t battle it, when in fact it’s still hallucinating and making mistakes, will harm it in the long run. People are fed up with too much AI everywhere. That in combo with the grid question and how these companies will survive in the long run without constant cash injections, will be the determining factor. Thanks for the comment!
Now with Iran war, KSA is halting any foreign investment and prioritizing the internal damage repair done by war. That will delay more grid funding in US
The Danish newspaper made me very happy to read about. I still receive paper magazines in addition to my online subscriptions… so if I were living in Denmark, I’d probably be one of them. :)
Doesn't seem like a good thing for innovation and ecosystem health, all this capital concentration
I'm also advising clients to hedge their bets and mix small language models into their stack. We're pre-IPO but at some point the VC funded token subsidies will stop..
I think for now it’s the fastest way to growth. And for sure we’ve seen other industries (think about Fintech when it was hot or mobile development) where we saw the same outcome. I just question if all the mega deals and promises, mainly by OpenAI, will work out. But they also won their lawsuit now, so who knows 😅.
I was watching a data centre video by vox yesterday..people in the local communities across the US mostly aren’t even aware that data centers are being built. They aren’t a part of the conversation and there isn’t much transparency around it either!
Totally! I work on my next piece about OpenAI's DeployCo, and will tackle this debate as well. Unfortunately, like with Big Tech, there is not a lot of talk about the local integration. Hopefully, we can change this by including it in our reporting and raising awareness. Thanks for the comment. :-)
AI money is massively concentrated in a few players, and the real constraint is physical infrastructure like power and transformers that can’t scale fast enough
Yeah, it’ll be a really interesting race to watch for sure! I’m also curious how nation-states will react to all of this. If I were leading a Western country and overseeing a sovereign wealth fund or central bank, I’d pick one of these companies and treat it as a strategic national asset. But hey, what do I know :-)
Best contrarian AI take I've read this month. do you buy the "grid, not valuations" thesis or is the power bottleneck just another thing capital eventually muscles through?
I think it’s part of it. The other question I didn’t cover, because the piece was already long enough, is if the deliberate fear mongering with AI being so smart and you can’t battle it, when in fact it’s still hallucinating and making mistakes, will harm it in the long run. People are fed up with too much AI everywhere. That in combo with the grid question and how these companies will survive in the long run without constant cash injections, will be the determining factor. Thanks for the comment!
In early. Then out..... it's all about timing 📈📉
True that!
Now with Iran war, KSA is halting any foreign investment and prioritizing the internal damage repair done by war. That will delay more grid funding in US
Yeah this is getting crazy!
The Danish newspaper made me very happy to read about. I still receive paper magazines in addition to my online subscriptions… so if I were living in Denmark, I’d probably be one of them. :)
Yes I loved the story as well when I read about it. Seems like they have a solid subscriber mix.
Forget models and money. The boring stuff like transformers and permits is what's holding up the entire industry.
Haha it’s always the boring stuff you have to watch closely
The bubble doesn't pop on valuations but on power and the grid says no.
Let’s see. Maybe other regions will be the saver
Doesn't seem like a good thing for innovation and ecosystem health, all this capital concentration
I'm also advising clients to hedge their bets and mix small language models into their stack. We're pre-IPO but at some point the VC funded token subsidies will stop..
I think for now it’s the fastest way to growth. And for sure we’ve seen other industries (think about Fintech when it was hot or mobile development) where we saw the same outcome. I just question if all the mega deals and promises, mainly by OpenAI, will work out. But they also won their lawsuit now, so who knows 😅.
True - OpenAI is massively overleveraged. Hard to see them dig themselves out of the mess Sam created for them
Yeah but we for sure get enough drama to write about. Win-win I think 🤓
Until it tanks the global economy at least 🤔
😂
Has pressure on it sure, but I think Orange Man and his gang is more responsible for that and the devaluation of the world reserve currency 🙈
Yeah there are other things at play for sure
I was watching a data centre video by vox yesterday..people in the local communities across the US mostly aren’t even aware that data centers are being built. They aren’t a part of the conversation and there isn’t much transparency around it either!
Totally! I work on my next piece about OpenAI's DeployCo, and will tackle this debate as well. Unfortunately, like with Big Tech, there is not a lot of talk about the local integration. Hopefully, we can change this by including it in our reporting and raising awareness. Thanks for the comment. :-)
AI money is massively concentrated in a few players, and the real constraint is physical infrastructure like power and transformers that can’t scale fast enough
Yeah, it’ll be a really interesting race to watch for sure! I’m also curious how nation-states will react to all of this. If I were leading a Western country and overseeing a sovereign wealth fund or central bank, I’d pick one of these companies and treat it as a strategic national asset. But hey, what do I know :-)