Jensen dumped a mountain of material on everyone this week, but if you boil it down long enough, you get:
- LLMs are dead; long live the LLM. An LLM is like a person that could do math and has now learned to read and write. They can get better at it, but that's it. The next step is to organize them into productive units with plans and supervision. That's what's next. It's way harder.
- Most of the future growth in IT infrastructure spend will be AI-related. Traditional IT and AI-related spending will flip from the current 75/25% share to 25%/75%. ($1T+ market.) All major IT suppliers' actions (DELL, HP, Cisco) underscore this forecast.
- NVDA plans to lead the way and outlined two more generations of their product lifecycle. The new software infrastructure, Dynamo, could be significant and a kind of "new VMWare" (taking some liberty here.) Industry partnerships and investments in CUDA-based specialized libraries are key to the strategy.
- Energy may be the ultimate governor of what anyone can accomplish with AI. The human equivalent of time and attention. It's a physical limit. That means that efficiency will be as important as power.
On the IPO front, it gives CoreWeave $CRWV a boost. There are whispers that they are getting ready to market, and the price talk is $47 to $55. We need an S-1/A filing to take the next step. Some of our initial thoughts are here (CoreWeave Cracks). We still prefer Nebius $NBIS (Surprise $4B IPO), which has pulled back quite a bit.
Less clear may be how this impacts Cerebras $CBRS, which is still refining its positioning prior to marketing. Jensen talked up Perplexity. Maybe they will surprise us.
AI Fraud Parade Update
Our parade has expanded to 19 companies! (table below) I'm sure we'll be adding more soon. About 1/2 of the group is already down 90% or more but a handful are still in positive territory.
There are a few on the list that could prove investible, but we'd need to see some positive fundamental results.
SoundHound $SOUN has a chance to succeed primarily due to a private acquisition they made in the enterprise space. It remains to be seen what they will make of it.
Rezolve AI $RZLV is the most tantalizing name on the list. They have a bold story, grand ambitions, and a "strategic partnership" with Microsoft. Of course, they have gotten involved with Bitcoin, too. It sure looks like a baton twirler, but can the boy hunt?
Maybe we need to add floats like Quantum and Space to the parade. We'll work on it.
