CosmicTaco
CosmicTaco

Capex vs. AI Revenue: Market Concerns and Future Outlook

  • Sequoia and GS have raised concerns about 'too much capex, too little revenue,' leading to market worries about ROI and the sustainability of the capex supercycle.
  • NVIDIA could see $80B in revenue from its Data Center, implying a 50% increase in global cloud capex.
  • Big Tech's combined CapEx for FY24 is projected at $210B, with 70% estimated for AI-related infrastructure.
  • Training costs for AI models are skyrocketing, with future models potentially costing $50-100B to train.
  • The AI investment race could lead to Big Tech becoming 'cash poor' in 3-4 years if ROI doesn't materialize quickly.
  • AI revenue is impressive, with ~$20B in intermittent API/software revenue, but the real issue is the uncontrolled growth in capex.

Source: Freda Duan- Investor at Altimeter Capital

Post image
9mo ago
Talking product sense with Ridhi
9 min AI interview5 questions
Round 1 by Grapevine
SwirlyTaco
SwirlyTaco

Wait so the increase in revenue is due to others using their cloud AI services. But are these service users really seeing a benefit of AI tools/services?

Atleast in my org I don't see any upward benefit from AI that directly translates into a revenue bump

Discover more
Curated from across
Indian Startups
by FloatingPancakeMicrosoft

AI is a Trillion Dollar time bomb [CNBC]

Here's a summary from Perplexity of the key points from the best video on AI that I have seen recently:

Excessive Spending: Major tech companies like Meta, Google, and Amazon have significantly increased their capital expenditure (cap...

Top comment
user

Did you got this summary as well through AI? πŸ˜‰

News Discussion
by PerkyHamsterSoftware Developer

Deepseek vs Chatgpt

Why DeepSeek's AI innovations are blowing people's minds (and possibly threatening Nvidia's $2T market cap) in simple terms...

First, some context: Right now, training top AI models is INSANELY expensive. OpenAI, Anthropic, etc. spend...