The Generative AI wave has led to a surge in demand for GPUs and AI model training.
Investors are now questioning the purpose and value of the overbuilt GPU capacity.
For every $1 spent on a GPU, approximately $1 needs to be spent on energy costs to run the GPU in a data center.
The end user of the GPU needs to generate a margin, which implies that $200B of lifetime revenue would need to be generated by these GPUs to pay back the upfront capital investment.
The article highlights the need to determine the true end-customer demand for AI infrastructure and the potential for startups to fill the revenue gap.
The focus should shift from infrastructure to creating products that provide real end-customer value and improve people's lives.
Source : https://www.sequoiacap.com/article/follow-the-gpus-perspective/
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