When I think of GE and the old school industrials that it competed with, I can’t help but wonder if today’s hyper scaling tech companies are unwittingly waltzing into the same trap. They’re spending billions in capex on data centers to power their ai dreams—the very same ai whose large language models increasingly look like commodities: these are in some sense latter day dishwashers and plastics from ge’s era. I know that Zuck et al see trillion dollar markets in the future, and Zuck et al are savvier operators than Welch ever was, but history is littered with examples of companies that invested heavily in capex, only to not have revenues sufficient to generate a return on that capex.
It’s possible, but it’s strange to think of intelligence as being commoditized but also not valuable. I suppose it all comes down to the application, and at least in Meta’s case, the capex is already driving results. The GPUs he’s buying are paying for themselves via return on advertising spend, the LLMs are an embedded call option on AGI that also undercuts OpenAI and Google trying to monetize their LLMs.
When I think of GE and the old school industrials that it competed with, I can’t help but wonder if today’s hyper scaling tech companies are unwittingly waltzing into the same trap. They’re spending billions in capex on data centers to power their ai dreams—the very same ai whose large language models increasingly look like commodities: these are in some sense latter day dishwashers and plastics from ge’s era. I know that Zuck et al see trillion dollar markets in the future, and Zuck et al are savvier operators than Welch ever was, but history is littered with examples of companies that invested heavily in capex, only to not have revenues sufficient to generate a return on that capex.
It’s possible, but it’s strange to think of intelligence as being commoditized but also not valuable. I suppose it all comes down to the application, and at least in Meta’s case, the capex is already driving results. The GPUs he’s buying are paying for themselves via return on advertising spend, the LLMs are an embedded call option on AGI that also undercuts OpenAI and Google trying to monetize their LLMs.
Great points.