Something's Gotta Give on AI Economics

Описание: What happens when the biggest technology trend is built on economics that don't make any sense when viewed end-to-end? Eventually, some aspect has to change, but which one? 






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SHOW NOTES:

• Tokens are getting more expensive (https://ethanding.substack.com/p/ai-s...)
• Nvidia Earnings, Moats and China, Nvidia vs. the AI Labs (https://stratechery.com/2025/nvidia-e...)
• Oracle Assures Investors on AI Cloud Margins as It Struggles to Profit From Older Nvidia Chips (https://docs.google.com/document/d/1m...)





WHERE ARE THE BIGGEST AI RISKS?

• Jensen Huang (NVIDIA CEO) is convinced that the future will be built on always having the most advanced GPUs and Frontier Models. 
• Oracle is telling investors that they will significantly increase profit margins between now and 2028-30, although they have low margins now and they don’t make high margins on older chips
• The economics of AI (reasoning models, high#s of AI tokens) is in contrast to the established SaaS business model.
• Right now everything AI-associated has a high valuation, but these forces are working against each other. 
• Which one is going to give first? 





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