Smash Notes

Is OpenAI and Anthropic's Chip Revenue Share Falling?

at 11:18

From the episode: Is There an A.I. Bubble? A Debate.

Answer

Ezra Klein asks how AI demand looks once token use is separated from the chips that serve it. Azeem Azhar says the asset under investment is data centers, and 65% of the cost is the chip, the GPU or the AI accelerator. The environment is compute constrained because people are making extremely good returns in 18 to 24 months on an asset, since they can charge Uber surge pricing for the GPUs.

Amazon, Microsoft, and Google, and new labs called NeoClouds, buy billions of the GPUs, put them in data centers that now will start to cost billions of dollars, and rent the GPUs out. About 50% of the revenues go to Anthropic and OpenAI for their spending. The other 50% is a mix of other AI companies and firms running open source models or open weight models on the hyperscalers infrastructure. If the ratios stayed the same for the next three or four years, Azeem Azhar says the result would be someone effectively paying themselves around the back door.

The ratio has been declining because the hyperscalers are getting more and more business from real customers. Azeem Azhar takes the shift as a sign of a market maturing week after week, quarter after quarter.

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The Ezra Klein Show
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Is There an A.I. Bubble? A Debate.
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Paul Kedrosky, Azeem Azhar, Ezra Klein
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