Big Tech's Big Plan Undercovered

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Big Tech’s Big Plan Undercovered

You’ve surely seen the numbers. The largest tech companies in the world are all investing billions in AI and will invest a combined multiple trillions over this decade.

But what you haven’t seen is the ‘why.’ Journalists will tell you, ‘It is to build AGI.’ However, that only scratches the surface. I mean, what does that even mean?

And what they can’t even articulate is why they need to invest so much money and, crucially, what ‘thing’ they are trying to build. Today, we are answering just that by diving into:

The radical religion installed in Silicon Valley,

The unprecedented phenomenon of The Great Convergence among Big Tech companies,

A detailed and intuitive grounding of the ambitions of mega-corporations to build supercomputers with more compute power than all humankind (yes, I’m being serious).

The remaining challenges that could turn GPUs into glorified, overpriced calculators and the AI industry into the biggest money waste in the history of capitalism,

And we’ll even have time to proclaim the stock market's ‘Renaissance’ of a forgotten industry that could rise from the ashes thanks to AI.

If you’re an investor, you will now finally understand what companies representing a great part of your holdings are doing with their spare money and why, as well as possible new market opportunities. And if you’re an executive, strategist, or analyst, you will gain the capacity to decide whether this is pure madness or not.

While this article does not allow for hype, there is certainly much to take away from it. Let’s dive in.

Religion or Virus?

I’ve discussed a couple of times how AI, at least in the Silicon Valley area, is starting to look more like a religion than a science. And here, we are worshipping computation.

I’ve read countless blogs from AI start-ups and research papers, and one reference that continues to pop up extensively is The Bitter Lesson by Rich Sutton.

This very short piece boils down to one conclusion: Every advance in AI has been driven by one thing only: computation directed toward learning and search. It’s not algorithmic breakthroughs; it’s not data; what determines the next step-function improvement is more computation being made available at scale.

If that sounds familiar, that’s because, as we discussed last week, OpenAI's o1 models embody this vision.

Thus, what are companies with deep pockets doing? Well, pursuing that vision. But let me tell you, your brain can’t even fathom the extremes to which they will go to attain this.

The Hardware Lottery

As you probably guessed, most of this capital (approximately 50%) goes to GPUs. And despite the huge numbers (around $50 billion a quarter) the trend is only accelerating.

For instance, here are the staggering numbers of some of NVIDIA’s latest purchase orders:

Source

How much $ is that?

Assuming $25,000 per H100, Meta’s investment alone is around $8.75 billion. As for the rest, they are buying NVIDIA’s new GPUs, Blackwell, retailing at prices between $1.8 to $3…

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