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Navigating the High Cost of AI Compute | Andreessen Horowitz

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The generative AI boom is compute-bound. It has the unique property that adding more compute directly results in a better product. Usually, R&D investment is more directly tied to how valuable a product was, and that relationship is markedly sublinear. But this is not currently so with artificial intelligence and, as a result, a predominant factor driving the industry today is simply the cost of training and inference. While we don’t know the true numbers, we’ve heard from reputable sources that the supply of compute is so constrained, demand outstrips it by a factor of 10(!) So we think it’s fair to say that, right now, access to compute resources — at the lowest total cost — has become a determining factor for the success of AI companies. In fact, we’ve seen many companies spend more than 80% of their total capital raised on compute resources! In this post, we try to break down the cost factors for an AI company. The absolute numbers will of course change over time, but we don’t see

Navigating the High Cost of AI Compute | Andreessen Horowitz Infra Navigating the High Cost of AI Compute Guido Appenzeller, Matt Bornstein, and Martin Casado Posted April 27, 2023 Subscribe Share Share Email X LinkedIn Facebook Hacker News WhatsApp Flipboard Reddit Navigating the High Cost of AI Compute Table of Contents Share Share Email X LinkedIn Facebook Hacker News WhatsApp Flipboard Reddit Source: Midjourney The generative AI boom is compute-bound. It has the unique property that adding more compute directly results in a better product. Usually, R&D investment is more directly tied to h

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