Comment by twoodfin
5 hours ago
All true.
It does seem like the structural characteristics we’ve observed so far suggest there is a kind of flywheel from short-term to long-term advantage due to the capital requirements at various levels.
If you’re Nvidia, making the best GPUs today, the expanding wavefront of demand is consuming them with volume and margins to give you a huge edge in building out the best next generation of GPUs. Similar to how the mobile wave gave TSMC sustained advantage for about a decade now.
I’m guessing this is also what we’re seeing as Anthropic and OpenAI swap spots in the token-vendor market.
I can see the fly wheel in action for Nvidia[1], but in terms of model building - I think the companies that have the advantage here are not Anthropic or OpenAI, but rather companies with substantial revenues from other sources - Google is the obvious player here - reported to be planning on spending 185 billion this year without having a raise a dime from the markets, but there are plenty of other companies - like Meta or Alibaba who can easily fund the longer game from existing revenues.