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Lifespan of AI Chips: The $300 Billion Question - CITP Blog

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This week, Open AI announced a multibillion dollar deal with Broadcom to develop custom AI chips for data centers projected to consume 10 gigawatts of power. This investment is separate from another multibillion dollar deal OpenAI struck with AMD last week. There is no question that we are in the midst of making one of the largest industrial infrastructure bets in United States history. Eight major companies—Microsoft, Amazon, Google, Meta, Oracle, OpenAI, and others—are expected to invest over $300 billion in AI infrastructure in 2025 alone. Spurred by news about the vendor-financed structure of the AMD investment and a conversation with my colleague Arvind Narayanan, I started to investigate the unit economics of the industry from a competition perspective. What I have found so far is surprising. It appears that we’re making important decisions about who gets to compete in AI based on financial assumptions that may be systematically overstating the long-run sustainability of the indu

Lifespan of AI Chips: The $300 Billion Question - CITP Blog Lifespan of AI Chips: The $300 Billion Question October 15, 2025 – by Mihir Kshirsagar Comments Digital Infrastructure & Platforms Authored by: Mihir Kshirsagar This week, Open AI announced a multibillion dollar deal with Broadcom to develop custom AI chips for data centers projected to consume 10 gigawatts of power. This investment is separate from another multibillion dollar deal OpenAI struck with AMD last week. There is no question that we are in the midst of making one of the largest industrial infrastructure bets in United State

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