Comment by AJ007

The startups that are using API credits seem like the most likely to be able to achieve a good return on capital. There is a pretty clear cost structure and it's much more straightforward whether you are making money or not.

The infrastructure side of things, tens of billions and probably hundreds of billions going in, may not be fantastic for investors. The return on capital should approach cost of capital if someone does their job correctly. Add in government investment and subsidies (in China, the EU, the United States) and it become extremely difficult to make those calculations. In the long term, I don't think the AI infrastructure will be overbuilt (datacenters, fabs), but like the telecom bubble, it is easy to end up in a position where there is a lot of excess capacity and the way you made your bet means getting wiped out.

Of course if you aren't the investor and it isn't your capital, then there is a tremendous amount of money to be made because you have nothing to lose. I've been around a long time, and this is the closest thing I've felt to that inflection point where the web took off.