Azeem Azhar

What they want is focused, understandable return on capital over a three to 10 year period.

And yet with general purpose technologies, as it will be with AI, those gains are diffuse.

They may be spread out across

the economy.

They may be spread out across industries.

They may accrue to the public rather than to things that private companies can benefit from.

And the pathways may be indirect.

And there may be great lags before profits emerge.

So existing capital market apparatus doesn't price this kind of system level change.

It prices firm level cash flows.

This specific GPU cluster produces this specific revenue stream over the following years.

But my sense will be that AI's biggest gains will be a system-wide improvement, a system-wide option value.

It is an exponential gap.

The institutions of finance are not particularly suited to the dynamics of this particular technology.

And it's really not because

The participants are confused and are not brilliant and smart and diligent.

It's because of the nature of those exponential processes and how they're actually hard to rationalize in the linear spreadsheets around which decisions are made.

So this feels exceptional, but the pattern is familiar.

For a decade, I've been arguing that exponential technologies behave in this way, and it's playing out precisely in front of our eyes.

They accelerate quickly.