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AI’s $600B Question | Sequoia Capital

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In September 2023, I published AI’s $200B Question. The goal of the piece was to ask the question: “Where is all the revenue?” At that time, I noticed a big gap between the revenue expectations implied by the AI infrastructure build-out, and actual revenue growth in the AI ecosystem, which is also a proxy for end-user value. I described this as a “$125B hole that needs to be filled for each year of CapEx at today’s levels.” This week, Nvidia completed its ascent to become the most valuable company in the world. In the weeks leading up to this, I’ve received numerous requests for the updated math behind my analysis. Has AI’s $200B question been solved, or exacerbated? If you run this analysis again today, here are the results you get: AI’s $200B question is now AI’s $600B question. Note: It’s easy to calculate this metric directly. All you have to do is to take Nvidia’s run-rate revenue forecast and multiply it by 2x to reflect the total cost of AI data centers (GPUs are half of the tot

AI’s $600B Question The AI bubble is reaching a tipping point. Navigating what comes next will be essential. By David Cahn Published June 20, 2024 In September 2023, I published AI’s $200B Question . The goal of the piece was to ask the question: “Where is all the revenue?” At that time, I noticed a big gap between the revenue expectations implied by the AI infrastructure build-out, and actual revenue growth in the AI ecosystem, which is also a proxy for end-user value. I described this as a “$125B hole that needs to be filled for each year of CapEx at today’s levels .” This week, Nvidia compl

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