Ed Zittrain

So across the board with public stocks, nobody's showing a profit from AI.

And for the most part, nobody is showing even the revenue they're making from AI.

When I say revenue, I do not mean profit.

Microsoft revealed that a $37 billion ARR run rate for AI, the majority of that comes from open AI feeding it money.

from, well, OpenAI's venture capital funders and probably leftover Azure tokens from the $13 billion in funding.

Anthropic similarly is funded entirely with venture capital and their connected counterparties are seeing massive boosts in their remaining performance obligations, so their revenue backlog.

mostly from Anthropic and OpenAI.

In fact, between Microsoft, Google, and Amazon, $748 billion of their upcoming revenue, over half of it, comes from two companies, either buying Compute or, in Google's case, Anthropic buying TPUs from Google to rent back from Google.

The whole thing is very circular, and really, outside of OpenAI and Anthropic, there's not really any sign that there's a real revenue stream here.

I have serious questions about the way they count revenue, but as private companies, it's hard to pierce.

There's also the other real problem.

Big tech is, between Meta, Google, Amazon, and Microsoft, over $800 billion of capex.

I don't think data centers are being built at anywhere near the rates that people think.

I have on good authority that one of the major hyperscalers only has around one and a half gigawatts of actual IT capacity despite hundreds of billions of dollars of capex.

And data centers are just not getting built, 18 to 24 months minimum.

People see the AI boom as something that's happened, as in something that's – there's tons of data centers being built.

I've seen people saying tens of gigawatts built every year.

It's nonsense.

I think there may only be a gigawatt or two built every year.

The compute constraints people are facing are not a result of incredible demand.