David Sacks

The chart shows the combination of servers and networking equipment.

Separately, in 2021, Google took networking equipment from three to five years, and then in 2023, they took it from five to six years.

Separately, in 2021, Google took networking equipment from three to five years, and then in 2023, they took it from five to six years.

And so this is a result of this effort where they went in and did an analysis.

And so this is a result of this effort where they went in and did an analysis.

So what happened?

So what happened?

What happened in the data centers is that the data centers transitioned from being primarily data storage and data transfer systems, where you would use hard drives and RAM and memory to store data and then transmit it back out, to being data processing centers because of the AI boom.

What happened in the data centers is that the data centers transitioned from being primarily data storage and data transfer systems, where you would use hard drives and RAM and memory to store data and then transmit it back out, to being data processing centers because of the AI boom.

So as AI became more important in the data center, more of the dollars that are going into data centers were allocated towards chips

So as AI became more important in the data center, more of the dollars that are going into data centers were allocated towards chips

from data storage, which initially was hard drives, and you throw away the hard drives every 18 or 36 months, and then solid state memory, solid state memory would last two years, four years, six years, depending on the type of memory you're using, and RAM, and RAM had this kind of variable lifetime as well.

from data storage, which initially was hard drives, and you throw away the hard drives every 18 or 36 months, and then solid state memory, solid state memory would last two years, four years, six years, depending on the type of memory you're using, and RAM, and RAM had this kind of variable lifetime as well.

And then suddenly when you put these processors in to process the data to do AI, that's the majority of the spend and the majority of the energy is going towards the processors.

And then suddenly when you put these processors in to process the data to do AI, that's the majority of the spend and the majority of the energy is going towards the processors.

So if you pull up this clip, this is Google's head of AI and infrastructure speaking at a conference here recently.

So if you pull up this clip, this is Google's head of AI and infrastructure speaking at a conference here recently.

And I think that's the key part that's been going on.

And I think that's the key part that's been going on.

I made some calls and I checked around with some other friends and everyone says the same thing, that these seven and eight year old TPUs and GPUs that are sitting in the data centers are still being used and they're being used at 100% utilization.