> What are you going to use all this infrastructure to do? How is it going to change people’s lives?
there are some questionable linkages in that article, in the rush to discuss "the big numbers"
specifically, core AI "foundation" models are (supposedly) built once, while tuning and interaction follow, with less energy for each activity. If the infrastructure arms-race settles down (not there yet) then what does this technology do .. in markets? to society? for investors?
It is difficult to project actual social concern onto SequoiaCap here.. if they had it for a moment I am sure it would pass quickly.. But sure, what is the effect of the use of this money?
When people realize that their jobs are being replaced, that suddenly ads for lotteries and junk food are a lot more plentiful, that ads are auto-generated and placed in every conceivable device while human needs are visibly shortchanged (housing). Yes, actually, there might be consequences to all that.. is that the implied question, too?
"The important question to be asking is: How much of this CapEx build out is linked to true end-customer demand, and how much of it is being built in anticipation of future end-customer demand? This is the $200B question."
This is an amusingly incorrect question. It presupposes AI as if it was a technology like any other, which it isn't. It's deeply transformative. Money actually doesn't matter here.
AI is not for making money. Money is for making AI.
Good thoughts, really.
Author said, people enter BIG race, to buy huge number of GPUs, but at the moment not seen, from where their cost will be paid.
I mean, if $200B should been invested, this must consider at least 4 x $200B of returns (including salaries, fees, taxes, etc), so at least $1000B must be somewhere on horizon.
If industry will not found source of $1000B, will be just next bubble.
Yes, it is possible, to happen some wonder, for example, government could consider this very important, for example for defense, raise taxes and pay these money from budget.
But any possible money must appear nearest months.
This struck me as if it was written by an investment banker, so I looked up the author, and confirmed he was indeed an investment banker prior to joining Sequoia.
This thread by Guido Appenzeller from a16z's AI team is a strong rebuttal of the Sequoia article.[1] I personally found Sequoia's argument a bit strange, since it not only misunderstands the unit economics of the industry at a basic level, but further misunderstands the ways that AI will be "just another component" of software stacks — not unlike databases, high-level programming languages, network infrastructure, etc.
[1]: https://x.com/appenz/status/1704915400096649696