Originally published in Sequoia Stories, June 20, 2024.
The AI bubble is reaching a tipping point. Navigating what comes next will be essential.
In September 2023, I published AI’s $200B Question. The goal of the piece was to ask the question: “Where is all the revenue?”
At that time, I noticed a big gap between the revenue expectations implied by the AI infrastructure build-out, and actual revenue growth in the AI ecosystem, which is also a proxy for end-user value. I described this as a “$125B hole that needs to be filled for each year of CapEx at today’s levels.”
This week, Nvidia completed its ascent to become the most valuable company in the world. In the weeks leading up to this, I’ve received numerous requests for the updated math behind my analysis. Has AI’s $200B question been solved, or exacerbated?
If you run this analysis again today, here are the results you get: AI’s $200B question is now AI’s $600B question.
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