Nicholas Thompson’s Post

Here's the post: https://www.sequoiacap.com/article/ais-600b-question/

Nicholas Thompson always valuable insights, thank you – and AI and I approve of the hirsute aesthetic.

I am not nearly so smart, well connected and informed as you, but is AI investment really so different from standard capex investments that companies do constantly? Who would have said in 2001 'Intel is spending $100B on a new fab complex in Arizona that hasn't made any money yet' so they're a bad stock investment (for that reason)? No, ALL investments take time to spin up and recoup the money. Most of these returns are speculative - cannot be accurately calculated in advance. Why should a company lose value when they are actually gaining future increased earnings? That's shortsighted to me. I don't even see this is primarily as a race for first place in AGI. (Certainly that race does exist, but) companies are training their virtual assistants on different data with different rules and (I believe that) the resulting products will have different strengths and weaknesses. This variety of offerings should also undercut the theory of 'close to infinite' profit. Competition will undercut the market leader's profit margins, especially with a saturated market.

AI is definitely making waves, and the $600 billion investment in AI chips and data centers is a huge deal. To put it in perspective, it’s like the massive investments we saw in the telecom industry during the late 90s and early 2000s. Back then, billions were poured into laying fiber optic cables. Initially, there was a lot of skepticism because the returns were slow, and it seemed like an overinvestment. But over time, this infrastructure became the backbone of the internet boom, enabling the digital age we live in today. To contextualize $600 billion, think about it this way: it’s roughly equivalent to the GDP of countries like Switzerland. It’s also more than what massive companies like Apple or Amazon make in a year. This shows just how serious the commitment is towards AI. The key takeaway? While the AI sector is still in its early days with a big gap between spending and earnings, these investments could pave the way for groundbreaking innovations. So, while it seems like a massive spend now, it might just be setting the stage for the next big thing in tech. The only way to go from here is up! Let’s not forget how deeply integrated ai already is in our lives. There’s simply no turning back.

Not so fast #HealthTech #AI #Companies! You have to let #Nurses, #Physicians, #Pharmacists, & other #Licensed #Clinicians who live by an #OathofEthics lead every phase of the design, implementation, policies/procedures, ethics, & legal regulations of ANY #AI models that touch #PatientCare & #PatientData. #Licensed #Clinicians of all disciplines need to organize a group that demands to have involvement & approval of #HealthTech #AI products, services, policies/procedures, & regulations at facility level, state level, & federal level before they are implemented on #PatientCare. The business of #Healthcare & #HealthTech is already designed to maximize profit while being opaque, exploitative, inefficient, & dangerous for patients & frontline workers. National Nurses United American Nurses Association SEIU Healthcare SEIU UHW SEIU Doctors Council SEIU American Medical Association American Federation of State, County, and Municipal Employees Nicholas Thompson Ian Bremmer / GZERO Media Nita Farahany Dr. Wendy H. Wong Gabriela Ramos Eileen Donahoe JD, Ph.D Megan Metzger Karen Rommelfanger PhD Lucy Tournas, J.D. Amanda Zwarenstein Agnes McMahon Stephens

The amount of value created outside of the big tech companies is irrelevant to the big tech companies. You think they are going to lose money as an altruistic gesture to improve the world? 🤣 That is not why they are in this at all. Why would someone of your experience even think that??? Same thing with AGI - if the company that creates it can't control it and profit from it you think they are just going to gift it to the world? WTH. They'll terminate it just like any other non-profitable project once they realize they're never going to make ROI. Get real.

The market size was valued at around $62 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of over 40%, potentially reaching $600 billion by the mid-2030s. According to a 2020 report by Flexera, 94% of enterprises use cloud services, with 87% taking a hybrid approach, using both public and private clouds. Some small businesses, especially those with specific regulatory, security, or performance requirements, may opt for on-premises data centers. These companies often have sensitive data or legacy systems that make cloud adoption less attractive. About 50% of small businesses (with less than 100 employees) use on-premises servers, though this number has been declining in favor of cloud services. By 2025, Gartner predicts that 80% of enterprises will have shut down their traditional data centers, but this largely applies to larger enterprises rather than small businesses. According to Statista, the edge computing market, which includes small-scale data centers, is projected to reach USD 15.7 billion by 2025. Numerous AI startups are emerging, focusing on niche areas and innovative applications of AI, contributing to the overall market growth.  

While the current revenue from AI might not meet the staggering $600 billion mark, the technology is still in its relative infancy. Historical trends in tech show that initial investments often precede significant breakthroughs and revenue growth. For instance, the internet and mobile industries faced similar skepticism in their early stages. The heavy investment in AI infrastructure by companies like NVIDIA, Google, and Microsoft is not just about immediate returns. It’s about building a foundation for future advancements. As AI technology matures, the infrastructure will support more scalable and profitable applications.

One particular point of the argument seemed to echo the Crazy Eddie pitch by saying it was okay to lose money on every sale since you could make it up on volume or some later magical development. Also, it is never acceptable for companies to spew out cash without generating returns. Incinerating cash is never acceptable. Irresponsible stewards of shareholder equity regularly go out of business. A substantial portion of the author's discourse was very reminiscent of the chatter during the latter couple of years prior to the dot com unraveling. The constant refrain was "No problem, the big money will be rooming into the cash box soon enough making every expense worth it and then some. The future is unlimited." The survival rate was extremely low. Pay day for many of the more robust survivors was a decade or more into the future. The long term can be very long. Also, the business mix by the time the notable survivors regained prominence was quite different compared to the ones touted in the years straddling 2000.