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If I’m right, this spending is unsustainable. I was in the tech industry during the dot com boom, and I saw a similar dynamic with Sun workstations. For a couple of years every startup needed to raise millions of dollars just to launch a website, because the only real option was buying expensive Sun servers and closed software. Then Google came along, and proved that using a lot of cheap PCs running open-source software was cheaper and much more scalable. Nvidia these days feels like Sun did then, and so I bet over the next few years there will be a lot of chatbot startups based on cheap PCs with open source models running on CPUs. Of course I made a similar prediction in 2023, and Nvidia’s valuation has quadrupled since then, so don’t look to me for stock tips!

Nobody ever got fired for buying IBM, and nobody’s going to get fired for investing in OpenAI.