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David Cahn quote, Jun 20, 2024

Partner, Sequoia Capital · Jun 20, 2024 · Essay, AI's $600B Question

GPU computing is increasingly turning into a commodity, metered per hour. Unlike the CPU cloud, which became an oligopoly, new entrants building dedicated AI clouds continue to flood the market. Without a monopoly or oligopoly, high fixed cost + low marginal cost businesses almost always see prices competed down to marginal cost (e.g., airlines).

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Words found on the source page on Sep 25, 2026.

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AI’s $200B question is now AI’s $600B question.Jun 20, 2024· Essay
But we need to make sure not to believe in the delusion that has now spread from Silicon Valley to the rest of the country, and indeed the world. That delusion says that we’re all going to get rich quick, because AGI is coming tomorrow, and we all need to stockpile the only valuable resource, which is GPUs.Jun 20, 2024· Essay

On the same topics

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But the right tail of the market is thinner than almost anyone forecast.Tomasz TunguzSep 23, 2026· Post
Demand for intelligence is not a pyramid with a small, wealthy peak paying for everything beneath it.Tomasz TunguzSep 23, 2026· Post
Most business AI use is the messy middle: multi-step workflows that need a smart enough model at a price a company can afford. It is the most important part of the market today, & it is where the competition is fiercest.Tomasz TunguzSep 23, 2026· Post
If the top U.S. labs have to give up on what is supposed to be really important, they will look very “catchable.” The policy creates a big incentive for some other parts of the world to invest a lot more in compute.Tyler CowenSep 22, 2026· Post
A world with sufficient compute is one where intelligence is a commodity, and in commodity markets margin comes from a superior cost structure, which I would expect the leading model providers to have, in part because they have a meaningful lead in scaling and can apply superior AI to their infrastructure.Ben ThompsonSep 21, 2026· Post
Pure capability no longer translates directly into a moat.Ben ThompsonSep 21, 2026· Post
About this quote
Said by
David Cahn, Partner, Sequoia Capital
Where
AI's $600B Question
Topics
Compute, Economics
Company
Sequoia Capital
Source
sequoiacap.com/article/ais-600b-question/

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