Aswath Damodaran
speaker
1,201 appearances
7 recordings
3 series
first heard May 2025
last heard 7 Aug
Aswath Damodaran’s voice in public audio — every appearance, attributed to the second.
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recordings per month · last 12 monthsRecordings per month over the last 12 months — 6 in all, peaking in Nov 2025 with 2.
Appearances
It seems like a marginal cost is being created somewhere along the way that I'm not seeing.
And that marginal cost is not decreasing because tens of millions of people are using Google at the same time, because
Each sud seems to pro provide an additional cost.
So
As I said, I am not enough of an expert in AI to see where these economies of scale will come from, but I don't see them yet.
I don't see anything in the architecture that bends easily to scale where you can say the costs are going to decrease just because they get bigger.
On the premium side, it starts to shrink.
Maybe not collapse, but shrink.
McKinsey might be willing to pay nine thousand dollars or ninety thousand dollars and five hundred thousand dollars for an AI agent.
There would be premium products where you can charge a premium price even over the high cost, but it'll mean that that end market is going to be more premium product.
The economies of scale argument might work better in that lower margin market where you don't need Nvidia chips.
You don't need expensive data centers.
And you know, the reason I say that is I see a lot of stuff that I saw 10 years ago.
that was labeled as machine learning or, you know, look at this macro we built for Excel.
I see the same stuff today marketed as AI.
And my question is, why do you need any of this AR?
You don't need data centers, you don't need A NVIDIA chips.
You you could do this with the traditional computing power and without the access to data.
That's the part of AI that I think is going to be the scalable part.
We have low margins, but the scale takes care of it.
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