We are not in an AI bubble

By 20VC

Categories: VC, Startup

Summary

Contrary to popular belief, the recent AI boom is not an AI bubble. Prices are rising, not compressing, and the supply of AI capacity is immediately spoken for, suggesting sustainable growth.

Key Takeaways

1. OpenAI has grown to $20B in topline by 3x-ing capacity and 3x-ing topline, indicating demand is keeping up with supply.
2. Prices for AI services are rising, not compressing, which is the opposite of a typical bubble scenario.
3. The subsidization of AI by big tech and labs benefits consumers and startups, providing an 'intelligence subsidization'.
4. In previous bubble periods, there was a massive buildout of supply far ahead of demand, which is not the case currently.
5. The AI market is currently exhibiting signs of sustainable growth, not a speculative bubble.
6. Founders and builders can take advantage of the 'intelligence subsidization' provided by big tech and AI labs to benefit their startups and consumers.

Topics

• AI Growth Trends
• AI Pricing Dynamics
• AI Subsidization
• AI Supply and Demand
• Sustainable AI Expansion

Transcript Excerpt

You said bubble. No, I'm not in that camp. Why are you not in that camp? >> I'll tell you why. Look, one, you look at OpenAI's recent announcement, which is that they're at 20 billion of topline. And the way that they got there is they 3x capacity and they 3x topline. So every time they bring on capacity, all of that supply, that inference supply is 100% spoken for. We're seeing that story happen over and over again. Whereas in previous, you know, sort of so-called bubble periods, you saw this i...